Kristoffer Inton: When trying to evaluate global cement companies, the sheer size of operations, sometimes as many as 100 countries, makes it difficult to evaluate the net impact on the company level. Worse still, there's a tendency to rely too much on just economic growth or investment for forecasting future cement demand.
We've studied nearly 60 years of global cement consumption data, and have created a forecasting method that takes into account cement intensity--that is, the amount of cement used per dollar of investment, as well as economic growth and investment. Based on our analysis, the future looks bright for the U.S., Mexico, India, Indonesia, and the Philippines. We can't say the same for China and broader Europe.
Since Donald Trump's election, building materials share prices have rallied, leaving little opportunity. However, we think Cemex remains undervalued. Given its large Mexican exposure, we think the market is overlooking favorable market dynamics in Cemex's U.S. and Mexican operations that will drive impressive improvement in the coming years.