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Alan R. Goozner During the 1994 Peso crisis, I started an e-mail newsletter. This followed from my comments to Mexican interest groups and list servers on the rapidly expanding Internet. The newsletter became a copyright publication : "The Mexican Commentary." This had a limited paid... More
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  • GMK - Gruma Worry Over Venezuelan Nationalization
    WSJ Story on the Venezuelan "take over" could continue to do damage near term. Even with a complete Nationalization it only comprises 20% of the business. Worry could drive it down sharply however - more than 20% from its December peak.

    Facts do not support Nationalization - the culprit in the matter is a minority partner/holder. They need the continuation of corn meal production. If the minority holder is squeezed out, the company may come out of it with a larger stake.

    Near term results should not be impacted - profits should continue to flow to the bottom line.

    A further 9-10% drop in the stock price would discount complete Nationalization. Any good news could infer that business would continue as usual and would pressure the short sellers to pop the ADRs up by more than $1.

    I look for further immediate decline and a slower rebound to follow if not immediately, some time soon into the New Year unless good news comes to pop it back up faster.

    I hold GMK ADRs in all of my investment accounts and continue to view it as an excellent way to participate in North America's fastest growing economy.  I have been a recent purchaser of shares in a cost average up strategy

    Disclosure: I am long GMK
    Dec 29 9:06 AM | Link | 1 Comment
  • GMK Gruma: Sell-off Today in Weak Market
    GMK Gruma:  After a blazing positive reaction to the recent finance news, it is just natural to expect some profit taking.  This is has been at a much lower volume than the recent buying frenzy and today, volume is very light.

    October is a worrisome month for the market in General and its off to a weak start from overall weaker than expected economic news on employment in the United States.  This I believe is temporary and the economic recovery is still on track.

    Gruma today filed with the SEC a notice of extension of debt negotiation as filed with the Bolsa.  This is a legal requirement for Mexican companies but is in reality no new news.  One thing that does come to mind is that with the final terms better illustrated and analysts able to push the pencil to figure out potentials for future profitability then confidence will continue to build for expectations for higher valuations for the stock price.

    Today's market weakness for me is an opportunity where I did take advantage to purchase some additional shares.

    I continue to hold GMK ADRs is all my family accounts that I manage and feel better than ever that this company is going to do fabulously well.  Also of note is some recent publicity the Gruma (Grupo Maseca) recently received some international recognition.  (Link to follow)

    Disclosure:  Long

    Tags: GMK, Gruma
    Oct 01 10:54 AM | Link | 1 Comment
  • 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.

    Sep 24 9:12 AM | Link | 5 Comments
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