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GMK - Gruma ADRs What to Expect After the Refinance News

GMK sold off on the "good" news as expected.  Traders well anticipated the financing announcement and the terms are within the range of expectation.  In fact, the terms are better than I expected.   But traders had it in their plans to sell on the news to take profits and we have had a great run from its March 6-9 low of $.92 on the ADRs.

I still have to work out the cash flow and implications to the bottom line but the overall development is highly favorable.

But what now to expect in the stock price?

Looking at Cemex's trading pattern may give a clue.  During the period of its refinance announcement traders anticipation on August 13 peaked CX up to $11.14 for the ADRs only to see it close the next day with the official announcement at $10.76, down approximately 3%.  CX since then and only a little more than a month latter hit a recent high of $14.20, 32% higher than the post announcement low.

If Gruma was to follow a similar pattern, it could close at $8.40 sometime before the end of October.  Banamex has set a target equivalent for the ADRs of $8.10.

I currently hold GMK in all the accounts that I manage for my family and am currently bidding for some additional shares.