CX - Cemex - Monopolistic Business With 67% Upside And Divestitures As A Catalyst
We believe Cemex (CX) is an attractive business with monopoly characteristics. It trades at around 7x EV/EBITDA which is consistent with the sector, but cheap in absolute terms and relative to history. There is cyclical risk, but infrastructure-spending packages and Cemex's ongoing divestiture program and planned deleveraging could offer catalyst for re-rating. I believe a fair value for Cemex is closer to $7.50.
Why Cement And Aggregates Are Great Businesses
Cement and aggregate are typically transported by road. These are heavy products and road transportation costs rise with distance, due primarily to fuel and labor