Bargain Stocks for Black Friday: Cemex

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Looking for a promising stock? How about this one -- it's trading for about $6 per share, down from a 52-week high of about $32. (How do I know about it? Well, I bought my own shares of it at ... $32.) So it's down more than 80%. That's not really a big recommendation, though, I know. So consider these statistics, instead:

• According to the company itself, revenue and earnings are growing briskly: "Over the past decade, our consolidated revenue and EBITDA have increased at compounded annual growth rates of 19% and 14%, respectively."
• Per Capital IQ, its recent P/E ratio is around 3, while its five-year average P/E is 10.
• Per Yahoo! Finance, its PEG ratio is a mere 0.26.
• Its dividend yield is topping 12% at the moment, since the stock has sunk so low.
• In our CAPS stock-rating service, this company has earned five stars out of five. It is expected to outperform the market by 97% of more than 4,300 participants, and by 94% of more than 600 All-Stars.

Here's the deal -- it's a cement company. A big cement company. One of the biggest in the world, more than 100 years old, and based in Mexico. It's Cemex (NYSE: CX).

Cemex is also doing good in the world, trying to get cement to people in poor neighborhoods. (By the way, our annual Foolanthropy drive is under way -- I've already made my contribution, and I hope you'll learn more about it and consider doing the same.)

What happened
So why is this stock in the toilet? Well, look around you. The economy has slowed, taking demand for cement with it. Many infrastructure projects have likewise been put on hold. Gobs of companies have taken a big hit in 2008, and building-related ones are no exception. Check out these numbers:

Company	Stock performance, year to date
USG (NYSE: USG)	(76%)
Stanley Works (NYSE: SWK)	(36%)
D. R. Horton (NYSE: DHI)	(43%)
Masco (NYSE: MAS)	(58%)
Home Depot (NYSE: HD)	(14%)
Lowe's (NYSE: LOW)	(6%)

Source: Yahoo! Finance.

A brief tutorial digression
Permit me to share a little information on cement because ... well, it's just kind of cool. For starters, it's not the same thing as concrete. Concrete contains cement, along with sand and gravel. Cement, meanwhile, is derived from limestone, calcium, silicon, iron and aluminum, which are mixed and superheated in a kiln, and then pulverized into a powder and mixed with gypsum.

Once cement is mixed with water, it does its thing. It can even harden underwater. It can be shaped in myriad ways, is a powerful adhesive, and is incredibly tough.

Why I'm bullish
All right, back to the promising stock. I expect big things from Cemex, despite its being down some 80% for me right now. It looks like a dirt cheap value stock, and I'm thinking of buying more. Why? Well, remember that our current economy won't last forever. At some point, it will turn around, and cement will be in great demand again. I recently read that Mexico is already planning on more than $4 billion in emergency spending on infrastructure next year. I wouldn't be surprised to see America and other nations follow suit. Governments aren’t required to turn Cemex around, though -- just an economic recovery, accompanied by building and repairing homes and businesses.

Meanwhile, think about those emerging markets and big developing nations we investors like to drool over. Think of China, and India, and Russia, for example. How exactly are they going to become the developed giants we expect them to be? Well ... partly via cement. It's not glamorous, but it's necessary.

Cemex also has some advantages that can help it win lots of this future business. For one thing, it has locations all over the world, so while some competitors might have to spend a lot to deliver cement to a particular site, Cemex will often have a local provider. Its ubiquity and size are also helpful in keeping its prices competitive.

Share your thoughts!
If you haven't done so already, please sign in to the free CAPS community today and voice your own opinion on Cemex (or just read what others are saying).