Will CEMEX Build on This Year’s Gains?

With shares of CEMEX (NYSE:CX) trading at around $10.49, is CX an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

CEMEX is the largest producer of ready-mix concrete in the world. Therefore, when the economy is humming, CEMEX benefits in a big way. The past year has been especially strong for the stock as housing has rebounded. However, it seems as though perception has played more of a role than reality. Investors see a potential housing recovery and they want to be in ahead of the curve. The problem with the CEMEX situation is that its own recovery hasn’t been impressive. The company is still reporting losses, and revenue has gone nowhere. If you’re looking at this situation in a logical manner, then these aren’t good signs.

CEO Lorenzo Zambrano is confident that CEMEX will be able to charge more for concrete in the future due to the anticipation of increased demand. However, a continued recovery in housing (and construction in general) is far from a guarantee. We will expand on this in the Trends section. For now, let’s take a look at some important numbers prior to forming an opinion on the stock.