Gruma is a Mexican company that is the largest producer of corn flour and tortillas in the world. Their core brands Mission and Maseca are globally recognized category leaders.
Some years ago, I was surprised to find out that Mission has a good sized factory operation here in Malaysia where there is a big market for Indian and Middle East style breads and "wraps." Mission brand wraps have always been in the stores here...
Yea, there are many EM stocks that are "cheaper" than that now... What about Grupo Bimbo? They or Japan's Yamazaki Baking are the biggest bakery goods and bread producers in the world with numerous well known brands (Wonderbread etc)...
One of the funds I looked at last week (https://emergingmarketskeptic.substack.com/p/em-fund-stock-picks-commentary-february-21-2023) went into detail about them - said they continue to shift to higher value food products while controlling costs - and price increases are helping to cover rising costs...
Some years ago, I was surprised to find out that Mission has a good sized factory operation here in Malaysia where there is a big market for Indian and Middle East style breads and "wraps." Mission brand wraps have always been in the stores here...
They are a really impressive company. I was also surprised by how large a global presence they have.
I don't doubt they will continue to expand both their geographic footprint and value add product portfolio, profitably.
The only question for me is how much should I pay for it. At 17x earnings and 4x book, its not cheap.
Yea, there are many EM stocks that are "cheaper" than that now... What about Grupo Bimbo? They or Japan's Yamazaki Baking are the biggest bakery goods and bread producers in the world with numerous well known brands (Wonderbread etc)...
I looked at Grupo Bimbo's 2021 annual recently. Another impressively global Mexican food company, 4% of the global baking market!
But their balance sheet was concerning, liquidity wasn't great with a current ratio consistently below 1 and debt to equity of almost 3.
Also looks expensive at 23x earnings and 4x book.
If I had to choose between Bimbo and Gruma, I'd choose Gruma.