Cemex S.A. B de C.V. (ADR) (CX)

InvestorDeb (81.62) Submitted: 3/06/08 6:44 PM : Start Price: $25.26 CX Score: -18.67

I agree with Seth's call regarding the "Discounted free cash flow basis with an 11% discount rate -- assuming zero growth for the next five years, followed by only 3% growth from then to eternity -- Cemex shares look to be trading at a 40% margin of safety to their fair value. By a more generous model, the shares look priced at less than half their fair value. (Let's note that each of these three valuation models rests on growth projections that are far below Cemex's historical averages.) Should the construction economy turn up in a few years and take the growth strides we suspect it will, it would not be surprising to see these shares triple over the next five years."

The market is valuing Cemex based on fear (to be fair, the market fears just about EVERYTHING today...) Cemex is a leader in a hated sector, which makes it CHEAP. Buy 1/3 or 1/4 of a position right here, right now... You have a real chance of owning a multibagger in 5 years.

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