(2014-05-13) Ochoa-Rodríguez, M. (Mónica); Arango-Botero, C. A. (Carlos Andrés)
The paper contains the valuation of Cementos Argos (a Colombian cement company), in an international
environment, using the discounted free cash flow method based on public available
information, and considering a time horizon of 10 years. This valuation exercise is made of three
stages: sector and company analysis, subsequently, a survey of key macroeconomic variables and
their projections was conducted and an analysis of the macroeconomic risk to which the company
is exposed was carried out; valuation of Cementos Argos performed with a model created by Bancolombia
investment bank to valuate firms in Colombia and with Crystal Ball used to reach a range
of more real values through statistic simulations; comparison of multiples of Cementos Argos in
an international context, comparing it to similar cement companies (Cemex, Holcim and Lafarge)
around the world.
For a projection period of 10 years and a WACC (Weighted Average Cost of Capital) of 12,6% for
the first year, the value per share that the model shows is COP 6386, which is fairly close to the
trading price in recent months.
