4-Star Stocks Poised to Pop: Cemex

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Mexican cement giant Cemex (NYSE: CX  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Cemex's business and see what CAPS investors are saying about the stock right now.

Cemex facts

Headquarters (Founded) Garza Garcia, Mexico (1906)
Market Cap $5.63 billion
Industry Construction materials
Trailing-12-Month Revenue $13.0 billion
Management Chairman/CEO Lorenzo Zambrano
CFO Fernando Gonzalez
Return on Equity (Average, Past 3 Years) (5.8%)
Cash/Debt $733 million / $17.2 billion

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 4,056 members who have rated Cemex believe the stock will outperform the S&P 500 going forward.

This past fall, one of those bulls, mwlove, summed up the Cemex bull case for our community:

Looks like everyone is kicking [Cemex] while it's down, perhaps for good reason. I look around Latin America and all I see are houses made of concrete blocks. Sometime down the road, construction will pick up elsewhere. Cemex seems to have a plan to meet its debt obligations. If they don't go bankrupt, the stock should be back over $10 in a few years. I'll take a shot with a minimal position.

But before you run out and start gobbling up shares, there might be some industry peers that are better-suited to your individual investing profile.

Eagle Materials (NYSE: EXP  ) , for example, has a much lower debt-to-equity ratio than Cemex, so it might be a better choice for more risk-averse investors looking to minimize their downside. Meanwhile, Martin Marietta Materials (NYSE: MLM  ) offers a 2%-plus dividend yield, making it a particularly good pick for income seekers. And over the past year, Vulcan Materials (NYSE: VMC  ) shares have held up much better than the badly beaten Cemex, giving those who want to stay away from "falling knives" a much better option. However, when you consider that Cemex sports a much lower price-to-book and price-to-sales multiple than each of its peers mentioned above, the stock seems nicely suited for contrarian bargain hunters looking to buy into the space.

What do you think about Cemex, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Vulcan. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (1) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 03, 2012, at 11:52 AM, Teacherman1 wrote:

    I think it is a good long term investment if bought at the right price. I am in at $3.76, but could have been in at $2.76 if I had just made up my mind.

    Sometimes it doesn't pay to wait.

    Their primary problem is the ill timed purchase they made which saddled them with a horrendous amount of debt, just as the U.S. housing crisis reared it's ugly head.

    I am confident they will survive and benefit greatly from the eventual return of the construction sector, whether it is in housing, infrastructure, or a combination of the two.

    I am not in heavy, but if (when) the market has another "schitzo" episode, or some "pundificator" opines that they are going bankrupt, I will happily buy more.

    JMO and worth exactly what I am charging for it.

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