Wednesday, June 17, 2015

Seeking Alpha: Cemex At Last?

Careful stock selection in the building materials space has paid off over the past year. Steel Dynamics (NASDAQ:STLD), Headwaters (NYSE:HW), and Vulcan Materials (NYSE:VMC) have all done well, but Cemex (NYSE:CX) has been a loser, dropping 28% since my last update. Small comfort, then, other cement companies like Cementos Argos (OTCPK:CMTOY), Lafarge (OTCPK:LFRGY), and Holcim (OTCPK:HCMLY) have kept Cemex company in the underperformers list.

It's small comfort to those who have lost money on Cemex, but I don't think the company has committed many unforced errors over that time. More than anything, it seems that frustratingly weak recoveries in the U.S. (moreso in residential), Mexico, and Europe have weighed on results (and sentiment), with forex weakness in emerging markets adding another twist to the knife. The sluggish recoveries have pushed out the likely midpoint of Cemex's recovery cycle, but even if Cemex takes four years to get back to/over $4.5 billion in EBITDA, the shares still appear undervalued below $12.

Read more here:
Cemex At Last?

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