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Should Value Investors Buy Cemex (CX) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is Cemex (CX). CX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 15.83, which compares to its industry's average of 31.56. Over the last 12 months, CX's Forward P/E has been as high as 79.63 and as low as 5.96, with a median of 17.87.

We should also highlight that CX has a P/B ratio of 1.04. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.59. Over the past year, CX's P/B has been as high as 1.12 and as low as 0.23, with a median of 0.49.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CX has a P/S ratio of 0.72. This compares to its industry's average P/S of 1.26.

Value investors will likely look at more than just these metrics, but the above data helps show that Cemex is likely undervalued currently. And when considering the strength of its earnings outlook, CX sticks out at as one of the market's strongest value stocks.


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