|Barron's Buy on CX|
Long-Term Sentiment: Strong Buy 03/15/06 08:44 pm
Msg: 3803 of 3812
WEDNESDAY, MARCH 15, 2006 7:04 p.m. EST
WEEKDAY TRADER |
Cement Maker's Shares Ain't Heavy
By DIMITRA DEFOTIS
ONCE UPON A TIME, in a world preoccupied with computer code, investing in cement seemed positively bor-ing.
But Cemex, the third-largest cement maker in the world, has looked like a tech stock of old in the past 12 months, up more than 60%, thanks to strong pricing and demand.
And that could continue, because cement is looking more and more like a growth business with the need for roads and other infrastructure, especially in poorer countries.
In Mexico, where Cemex got its start, a flurry of building projects is taking root. And the company should continue to benefit from its 2005 acquisition of Britain's RMC Group, which gave Cemex exposure to construction growth in Eastern Europe.
Cemex has promised to make more acquisitions, too, and it has the credit profile and balance sheet to follow through. Yet the stock still looks cheap.