Saturday, May 26, 2018

Will Cemex Ever Get All Its Ducks In A Row?

If you want a good working example of a value trap, Cemex (CX) could be it. While management deserves a lot of praise for the ongoing deleveraging (not to mention guiding the company back from the brink years ago), its inability to meet its own guidance and deliver consistent performance has remained a real sticking point. What’s worse, there are valid concerns about the quality of the company’s infrastructure in some of its key markets.

I’m tired of sticking my neck out for Cemex, but the shares still seem to be pricing in a pretty bleak future. About 1% annualized FCF growth would be enough to support today’s price and even the most bearish analysts don’t think that’s likely. Cemex shares could offer worthwhile returns, then, but it is still an open question as to when management will produce the results that will drive those returns.

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Will Cemex Ever Get All Its Ducks In A Row?

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