Sunday, February 28, 2016

Seeking Alpha: Cemex Trying To Rebuild Support

Cemex (NYSE:CX) has been an absolutely lousy stock since the last time I wrote about it, falling more than 40%. That's dramatically worse than the performance of Italy's Buzzi (OTCPK:BZZUY), Vulcan Materials (NYSE:VMC), and Martin Marietta Materials (NYSE:MLM), but actually a bit better than LafargeHolcim (OTCPK:HCMLY) and the shares of Cementos Argos (OTCPK:CMTOY) which were in basically the same performance boat through the end of 2015.

Cemex can tie its poor performance to a number of factors, but most particularly to painful adverse currency moves and worries about the company's volume/market share in key markets like Mexico and Colombia due both to the economic health of those countries and the company's own pricing decisions. Add in weak energy markets and a slow recovery in U.S. construction, and 2015 wasn't the sort of year that anybody was expecting.

Cemex was a pretty popular stock with the sell-side until the fall of 2015 (including appearances on multiple top idea lists), but now it's a "show me" story. The shares have already seen a decent bounce from desperation lows, and they don't look like a "can't miss" on the basis of discounted cash flow. That's a tricky metric for a cyclical commodities company, though, and the shares do look more interesting on the basis of EBITDA and full-cycle ROEs.

Read the full article here:
Cemex Trying To Rebuild Support

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