CEMEX SAB DE CV

Where It Passes

Where It Falls Short

• Valuation models0% pass✗ 11▾

  CX overvalued: all 11 models price fair value below $10.55 (median $0.29)

  Graham fair value$0.37

  ✗Graham-2751.4% margin vs $10.55

  Buffett fair value$0.40

  ✗Buffett-2537.5% margin vs $10.55

  Lynch fair value$0.53

  ✗Lynch-1890.6% margin vs $10.55

  Greenblatt fair value$0.27

  ✗Greenblatt-3807.4% margin vs $10.55

  Dreman fair value$0.22

  ✗Dreman-4695.5% margin vs $10.55

  Munger fair value$0.29

  ✗Munger-3537.9% margin vs $10.55

  Pabrai fair value$0.31

  ✗Pabrai-3303.2% margin vs $10.55

  Akre fair value$0.31

  ✗Akre-3303.2% margin vs $10.55

  Marks fair value$0.12

  ✗Marks-8691.7% margin vs $10.55

  Ackman fair value$0.29

  ✗Ackman-3537.9% margin vs $10.55

  Templeton fair value$0.08

  ✗Templeton-13087.5% margin vs $10.55
• Valuation8% pass✓ 3✗ 25▾

  12 of 13 flag CX's valuation — Graham, Lynch, Greenblatt +9 more

  Net income / market capitalization+6.17%; #1374/6340 (top 21.7%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Price / 3-yr avg EPS708.1x

  ✗Graham<= 15x

  Price-to-Book Ratio37.6x

  ✗Graham<= 1.5x

  P/E x P/B26,629.2

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)10.53

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value9.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=9.0%, ROC=20.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS495.3x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)241.8x

  ✗Dreman< 8x

  Price / Book Value per Share37.6x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=495.3x, OE Yield=0.3%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=495.3x, FCF Yield=5.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=495.3x, P/B=37.6x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-4620.4% (IV=$0.22 vs Price=$10.55)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share512.2x

  ✗Ackman<= 25

  Price vs. Trailing Low188% of trailing low ($5.61)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Positive book equity / market capitalization+0.7998; #1924/6449 (top 29.8%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS495.3x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E0.09

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share162.67x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+36.6%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+1.0642; #1701/5247 (top 32.4%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+5.87%; #1396/4519 (top 30.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-19.40%; #3937/6202 (top 63.5%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability13% pass✓ 11✗ 24▾

  14 of 16 flag CX's profitability — Graham, Buffett, Lynch +11 more

  Net income / market capitalization+6.17%; #1374/6340 (top 21.7%)

  ✓AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive EPS (10 years)9/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)73.4%

  ✓Graham>= 33% growth

  Net Income Positive (10+ years)9/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)1.4%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)11.2% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$1.2B

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)1.97

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)10.53

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR47.0%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE7.7%

  ✗Lynch> 15%

  EBIT / Enterprise Value9.0%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=9.0%, ROC=20.8%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets3.44%

  ✓PiotroskiROA > 0

  ROA Change YoY0.64% -> 3.44% (delta: +2.80%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=6.94%, ROA=3.44%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY33.7% -> 33.6%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue6.0%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity7.7%

  ✗Dreman> 12%

  Margin of SafetyP/E=495.3x, P/B=37.6x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity5.8% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-4620.4% (IV=$0.22 vs Price=$10.55)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency9/10 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue11.2%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity7.7%

  ✗Ackman>= 15%

  5-Year EPS CAGR47.0% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend5.9% (2022) -> 11.2% (2024)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 30.5% -> 33.6%, operating margin 5.9% -> 11.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Gross profit / total assets+19.92%; #2065/3702 (top 55.8%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+7.71%; #2132/5226 (top 40.8%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0331; #2031/5884 (top 34.5%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR47.0% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years9/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag CX's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio0.82

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)5.1%

  ✗Buffett> 10%

  ROIC - WACC-4.9%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)20.8%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.74 -> 0.82

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.58x -> 0.59x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities0.82

  ✗Dreman> 1.5

  Return on Invested Capital8.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2022: ROIC=4.0%; FY2023: ROIC=7.7%; FY2024: ROIC=8.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC7.4% (RR=90% x ROIC=8.2%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 8.2%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts29% pass✓ 5✗ 12▾

  Split decision: 11 FAIL · 4 PASS · 1 BUY

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (2/7)✗GreenblattRank #683✓PiotroskiBUY (F-Score 8)✗DremanFAIL (4/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (3/5)✓AckmanPASS (4/9)✓TempletonPASS (4/8)✓SleepPASS (3/6)✗AsnessFAIL (Rank #795/2370 (Top 33.5%))✗NeffFAIL (3/6)✗SchlossFAIL (3/7)✗OshaughnessyFAIL (Rank #665/963 (Top 69.1%))
• Debt & Leverage42% pass✓ 7✗ 8▾

  7 of 12 flag CX's debt & leverage — Graham, Buffett, Lynch +4 more

  Debt Levels0.44

  ✓MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  LT Debt vs Net Current AssetsLT Debt $5.3B vs NCA $-1.1B

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.44, IC: N/A

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.44

  ✗Lynch< 0.33

  Cash - Long-term Debt$-5.0B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change21.82% -> 19.56%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.82

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.44

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Interest Coverage & Debt/EBITDAIC=N/A (no interest expense), D/EBITDA=1.7x

  ✓MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.44

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.4404; #2341/4210 (top 55.6%)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy$1.2B

  ✓BuffettPositive and growing

  FCF Positive and Growing$894.0M

  ✗LynchPositive and growing

  Operating Cash Flow$1.9B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=6.94%, ROA=3.44%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)241.8x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=495.3x, FCF Yield=5.9%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive10/10 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap0.2%

  ✗Ackman>= 4%

  Price / FCF per Share512.2x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency10/10 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$894.0M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+5.87%; #1396/4519 (top 30.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth50% pass✓ 8✗ 5▾

  4 of 8 pass — Lynch, Ackman, Sleep +1 more object

  EPS Growth (3-yr avg, 10-yr window)73.4%

  ✓Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)10.53

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR47.0%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -17.0% vs Rev: -2.1%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$0.00 (2015) -> $0.02 (2024)

  ✓DremanPositive over recent years

  EPS CAGR32.1% CAGR over 9 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency9/10 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth2.3%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR47.0% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 30.5% -> 33.6%, operating margin 5.9% -> 11.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR4.6%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR47.0% over 5 years

  ✗Neff7%-20% annualized