Cemex SA (CX-N)

Cement business in Mexico. Extremely price sensitive and economically sensitive. Does well when the economy is going great guns, and poorly in recessionary times. Up in the short term, but last 20 years the returns have been between 0-4%. Credit rating of BB High, which is junk, so will always pay more for debt.

In Mexico, he owns KOF.

Building products, HQ in Mexico. Mainly cement and ready-mix concrete. 1/3 revenue comes from US. Outperforming broader index since mid-2022. 10x forward earnings, 15% growth rate. Likes the industrial space. Decent valuation. Technicals OK, above 200-day MA, which is also trending higher.

40% of revenues are already in the US, so Trump is not going to have a huge detrimental effect. The only problem with this company is that they made a bad acquisition about 5-6 years ago, and are still paying for it. Their credit quality is a little under investment grade, and they still have a lot of debts to pay off before they can really turn this company around and start to have more success.

You have time on this. They are still shutting down production in the shale oil/gas. This is just not the right cyclical moment. Chart indicates that this is starting to turn. He would want to see it stabilize. Give it some time.

This was a market favourite pre-financial crisis where it had too much debt. It is one of the most basic industries and has done relatively well. If you are looking for one play on global cement demand, this is the most global of them all.

One of the top 3 cement producers globally and has an enormous range. With the financial crisis, being geographically diversified didn’t work. It hasn’t done badly over the last 5 years, however it is a construction play. If you are worried about the outlook for the economy, you should consider taking a loss on this if you own.

(A Top Pick Sept 6/13. Up 2.21%.) This is his highly leveraged bet on an improving economy, but obviously it didn’t work out very well. If you believe in the economy, it is a good one to own, but feels it is dangerous to own it right now.

Starting to perform a little better. The debt levels on the balance sheet are a little high. A pretty good infrastructure play. It is Europe, Mexico, Latin America.

Cement ready mix and aggregates. Exposure to Mexico, US, Europe and emerging markets. A plant is very, very expensive to build so competitors find it hard to enter.

The largest cement producer in the Americas. Losing money for the last 4 years because they leveraged up on debt just before the financial crisis. They refinanced the debt in 2011. Not the best way to play Mexico because they floated their Latin American housing business as a separate subsidiary and that would be a better play. BNS-T might be an even better way to play Mexico.

They make concrete. This is a bet on an improving American and European economy. Have a lot of debt. Likes this because an indebted company, whose earnings start to improve, the stock goes up a lot because investors have a discount on it because of debt. Very volatile.

(Market call minute.) Thinks the valuation is a bit too rich.