Cemex Subjecting Investors To Mexican Cement Torture

I wasn’t overly fond of Cemex (CX) earlier this year, as I was worried about the demand outlook in both Mexico and the United States, and management’s inability to generate real value for shareholders despite following a generally sound plan. The shares have fallen another 20% since then, and the outlooks for both Mexico and the U.S. are heading in the wrong direction. Additional asset sales do underline management’s interest in improving the company by selling under-earning assets, but they don’t really create all that much near-term value.

I’ve reduced my modeling estimates yet again, and the shares still seem quite cheap. At this point I do find myself asking “how much worse can it really get?”, but that’s a question that the market has a way of answering along the lines of “this much worse!” Mediocre near-term growth prospects are likely to weigh on results, but I can definitely understand the appeal to patient value-hounds.

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Cemex Subjecting Investors To Mexican Cement Torture