As of July 17, 2023, Cementos Argos S.A. (CMTOY, Financial) is trading at $6.66, marking a significant 72.08% change in the stock's price. With a market capitalization of $1.6 billion and sales of $2.8 billion, the company's financial performance appears robust. The GF Value, a proprietary measure of intrinsic stock worth, stands at $6.84, suggesting that Cementos Argos S.A. (CMTOY) is fairly valued.
Cementos Argos S.A. is a leading cement producer, holding the top position in Colombia and the second-largest in the United States. The company's focus lies in the exploitation of the cement industry, production of concrete mixes, and other cement, lime, or clay-based materials. It also engages in acquiring and exploiting minerals or deposits of exploitable minerals in the cement industry.
GF Value Analysis of Cementos Argos S.A. (CMTOY, Financial)
According to GuruFocus Value calculation, Cementos Argos S.A. (CMTOY) is fairly valued. The GF Value is an estimation of the fair value at which the stock should ideally be traded. It is calculated based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and estimates of future business performance. If the price of a stock is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
Financial Strength and Profitability
Before investing in a company, it's crucial to assess its financial strength. Companies with poor financial strength pose a higher risk of permanent loss. Cementos Argos S.A. has a cash-to-debt ratio of 0.14, which is lower than 76.16% of companies in the Building Materials industry, indicating fair financial strength.
Companies with consistent profitability over the long term offer less risk for investors. Cementos Argos S.A. has been profitable 9 times over the past 10 years, with an operating margin of 9.71%, ranking better than 60.61% of companies in the Building Materials industry.
Growth and ROIC vs WACC
Growth is a vital factor in company valuation, and companies that grow faster create more value for shareholders. Cementos Argos S.A.'s average annual revenue growth is 7%, which ranks better than 56.58% of companies in the Building Materials industry.
Comparing a company's return on invested capital (ROIC) with the weighted cost of capital (WACC) is another way to assess its profitability. Cementos Argos S.A.’s ROIC is 2.71, and its cost of capital is 9.47.
Conclusion
In conclusion, Cementos Argos S.A. (CMTOY, Financial) appears to be fairly valued. The company's financial condition is fair, and its profitability is strong. Its growth ranks better than 58.77% of companies in the Building Materials industry. To learn more about Cementos Argos S.A. stock, check out its 30-Year Financials here.
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