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Gruma Falls as Santander Drops From Top Picks: Mexico City Mover

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May 7 (Bloomberg) -- Gruma SAB, the world’s largest maker of corn and wheat tortillas, fell to the lowest price in more than a month as Banco Santander SA removed the stock from its top recommendations.

Shares fell 2.8 percent to 33.2 pesos at the close in Mexico City, the lowest since March 23. The benchmark IPC index gained 1.6 percent.

“Gruma’s stock price had almost reached our target price and margins were lower than we had expected,” Santander analysts Gonzalo Fernandez and Arturo Espinosa wrote in a research note dated today. The bank is replacing Gruma with Fibra Uno in its top picks for Mexican stocks, the note said.

First-quarter net income fell 98 percent to 83.9 million pesos ($6.4 million) from the year-earlier period, Gruma said April 25 in a statement to the stock exchange. Costs jumped as natural gas hedging losses boosted sales expenses by 17 million pesos and financing costs rose by 207 million pesos because of a writedown from a “mark-to-market currency valuation” on hedging contracts linked to corn purchases, the company said.

After the earnings report, Santander cut Gruma to hold from buy. In the past year, the San Pedro Garza Garcia, Mexico-based company’s shares have gained 51 percent.

Gruma’s press office didn’t return e-mails and phone calls seeking comment.

To contact the reporter on this story: Carlos Manuel Rodriguez in Mexico City at

To contact the editor responsible for this story: David Papadopoulos at

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