NEW YORK (
-- Gruma SAB de CV
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, notable return on equity, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Food Products industry and the overall market, GRUMA SAB DE CV's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.3%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 1520.4% when compared to the same quarter one year prior, rising from $21.20 million to $343.44 million.
Gruma, S.A.B. de C.V., through its subsidiaries, primarily engages in the production, marketing, distribution, and sale of tortillas, corn flour, wheat flour, and related products. The company also provides grains, such as rice and oats. The company has a P/E ratio of 50.4, above the average food & beverage industry P/E ratio of 25.3 and above the S&P 500 P/E ratio of 16.2. Gruma SAB de CV has a market cap of $1.1 billion and is part of the
industry. Shares are up 2% year to date as of the previous trading day's close.
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