NEW YORK (TheStreet) -- Cemex SAB de CV (CX) is leading the New York Stock Exchange as the most actively traded stock early in Tuesday's trading session. By mid-morning, 33.8 million shares had changed hands, triple the stock's three-month average daily trading volume. The Mexican construction giant gained 1.6% to $11.78.
A day earlier, the cement manufacturer received a boost on the news the European Commission had rejected a request from Germany's corporate watchdog to rule on Holcim's purchase of a number of its Europe-based assets. The request to review the acquisition was initially made on the belief the it would reduce competition in construction markets in northern and western regions of Germany.
TheStreet Ratings team rates CEMEX SAB DE CV as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate CEMEX SAB DE CV (CX) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CEMEX SAB DE CV has improved earnings per share by 32.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CEMEX SAB DE CV continued to lose money by earning -$0.79 versus -$1.23 in the prior year. This year, the market expects an improvement in earnings (-$0.41 versus -$0.79).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Construction Materials industry average. The net income increased by 30.9% when compared to the same quarter one year prior, rising from -$216.20 million to -$149.43 million.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The gross profit margin for CEMEX SAB DE CV is currently lower than what is desirable, coming in at 34.27%. Regardless of CX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -3.82% trails the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Construction Materials industry and the overall market, CEMEX SAB DE CV's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: CX Ratings Report