Grupo Bimbo’s (OTCPK:BMBOY) (BIMBOA.MX) mascot Osito may finally be coming out of hibernation, at least in the U.S., as recent market trends indicate that the company has regained some pretty meaningful share in the last couple of quarters. Whether that lasts, though, and allows the company to drive long-awaited margin leverage in North America is still a big question, and there’s still a lot of work for management to do to improve its Latin American business outside of Mexico, to say nothing of driving enough share growth and volume in other geographies to justify the investments made there.
These shares haven’t done much since my last write-up, which is basically what I expected, and they have lagged the likes of Gruma (OTC:GMKKY), Flowers (FLO), and Mondelez (MDLZ) over that time. I still have pretty mixed feelings about the company. Although the ROIC has been pretty reliably in the double-digits, the company’s growth by M&A strategy has produced mixed results at best, and progress on various self-improvement initiatives has been slow. If management can get FCF margins back into the mid-single-digits on a reliable basis, I think there’s value here, but that’s still a work in progress.
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