As of July 17, 2023, Gruma SAB de CV (GPAGF, Financial) has seen a significant price change of 23.82%, with its stock currently trading at $17.1 per share. The company has a market capitalization of $7.9 billion, with an EPS of $0.89. According to GuruFocus.com's unique GF Value indicator, the company is fairly valued, with a GF Value of $16.74.
Gruma SAB de CV originates from Mexico and is a global leader in food production. The company produces a wide range of food products including corn and flour tortillas, wheat flour, naan, pita bread, flatbreads, wraps, chapatti, and pizza bases. Additionally, they manufacture snacks, pasta, rice, condiments, and palm hearts. With operations across America, Europe, Asia, and Oceania, Gruma SAB de CV's products are available in over 100 countries under renowned brands such as Maseca, Robin Hood, Mission, Guerrero, Tortiricas, and Tosty.
GF Value: A Comprehensive Valuation Method
The GF Value of Gruma SAB de CV (GPAGF, Financial) suggests that the stock is fairly valued. This estimation is based on historical trading multiples, an adjustment factor from GuruFocus considering past performance and growth, and future business performance estimates. If a stock's price is significantly above the GF Value Line, it is deemed overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher. The GF Value Line represents the fair value at which the stock should ideally be traded.
Financial Strength and Profitability
Before investing, it's crucial to assess a company's financial strength. Companies with poor financial strength pose a higher risk of permanent loss. Gruma SAB de CV's cash-to-debt ratio is 0.15, which is lower than 72.52% of companies in the Consumer Packaged Goods industry, indicating fair financial strength.
Profitable companies, especially those with consistent profitability over the long term, pose less risk. Gruma SAB de CV has been profitable 10 over the past 10 years, with a revenue of $5.9 billion and an EPS of $0.89 in the past twelve months. Its operating margin is 11.42%, ranking better than 77.58% of companies in the Consumer Packaged Goods industry, indicating strong profitability.
Growth and ROIC vs WACC
Gruma SAB de CV's average annual revenue growth is 16.3%, outperforming 76.81% of companies in the Consumer Packaged Goods industry. The 3-year average EBITDA growth is 7.3%, ranking better than 52.61% of companies in the industry.
Comparing a company's return on invested capital (ROIC) to the weighted average cost of capital (WACC) is another way to assess profitability. Gruma SAB de CV's ROIC is 13.03, and its WACC is 9.01, implying the company is creating value for shareholders.
Conclusion
In conclusion, Gruma SAB de CV (GPAGF, Financial) appears to be fairly valued. The company's financial condition is fair, and its profitability is strong. Its growth outperforms 52.61% of companies in the Consumer Packaged Goods industry. For more information about Gruma SAB de CV's stock, check out its 30-Year Financials here.
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