CX continues to be a "hold" in Santander's eyes (as in those of our MDP folks), but they raised the price target on the ADR from $12 to $14 citing:(1) the completion of its debt refinancing; (2) information about its 2010-2013 business plan; and (3) the call for a stockholders meeting at which it will propose a capital increase of up to 160 million ADRs through an equity offering or convertible bonds.The stock stays a hold because: the potential stock overhang from an equity offering. The refinancing was completed at rates slightly above our expectations; as a result, we are slightly increasing our cost of debt for Cemex from 6.4% to 6.7% and our discount rate from 9.4% to 9.5%.Assuming 10% to 20% dilution of existing shareholders, $14 is the top end of an optimistic valuation. As I wrote when we sold at $10, we "captured about 70% of the upside I think exists if construction rebounds and Cemex pulls off its restructuring plans. I think that's sufficient given the potential downside risk."The stock has proceeded to capture almost all of that remainder 30% of upside, so if you haven't sold CX, you may want to consider it now, particularly in light of more attractive opportunities for your capital.Tim
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