I did research on Bolsa Mexicana de Valores. I really liked the recurring nature of their business, and the dominant position they hold. However, I could not quite understand Valmer's business.
Also, around 30% of their revenue comes from INDEVAL, Mexico’s Central Security Depository. This is a great business. They own the rights to 92% of net income, but are minority shareholders in the business.
Nevertheless, INDEVAL's business greatly depends on settlement and custody of government bonds. I worry that Banxico could create their own Security Depository.
Thanks for adding value! Sounds like the 30% revenue is not worth a high multiple, given the risk that the government might take it away or reduce it profitability.
The more I look into Grupo Comercial Chedraui SAB de CV a Mexican supermarket chain with a strong presence in the US the better it becomes. No debt, great historic results, demographic tailwind, benefits from cheaper pesos and cheap compared to US competitors.
Depends on which ones you like. I would use a mix of 2022 & 2023 numbers. Free cash flow (553M & 1.203M) & EBITDA (2.7B & 3.3B) on one side and divide by market cap (9.5B) and market cap + net debt (6.9B). (9.5+6.9) / (Mix of 2022 & 2023 EBITDA: 3.0B) = 5.5 Which is not high.
Risk for Cemex though are the very high cement prices in Mexico. Those prices (and Cemex margins) might decline due to increased competition.
I did research on Bolsa Mexicana de Valores. I really liked the recurring nature of their business, and the dominant position they hold. However, I could not quite understand Valmer's business.
Also, around 30% of their revenue comes from INDEVAL, Mexico’s Central Security Depository. This is a great business. They own the rights to 92% of net income, but are minority shareholders in the business.
Nevertheless, INDEVAL's business greatly depends on settlement and custody of government bonds. I worry that Banxico could create their own Security Depository.
Thanks for adding value! Sounds like the 30% revenue is not worth a high multiple, given the risk that the government might take it away or reduce it profitability.
The more I look into Grupo Comercial Chedraui SAB de CV a Mexican supermarket chain with a strong presence in the US the better it becomes. No debt, great historic results, demographic tailwind, benefits from cheaper pesos and cheap compared to US competitors.
what are the valuation multiples for Cemex?
Depends on which ones you like. I would use a mix of 2022 & 2023 numbers. Free cash flow (553M & 1.203M) & EBITDA (2.7B & 3.3B) on one side and divide by market cap (9.5B) and market cap + net debt (6.9B). (9.5+6.9) / (Mix of 2022 & 2023 EBITDA: 3.0B) = 5.5 Which is not high.
Risk for Cemex though are the very high cement prices in Mexico. Those prices (and Cemex margins) might decline due to increased competition.