Cemex or why geographic diversification helps

Mexico-based Cemex, the world's leading construction materials firm, certainly qualifies as a victim of the U.S. housing collapse. The U.S. market represents a quarter of its sales and in the second quarter its sales fell 16% year-on-year, following a similar drop in volume. Spain, another big market facing housing woes, also saw a more modest volume contraction.

Yet, Cemex managed to squeeze out a 6% rise in sales during the second quarter. How? Well, a strong euro (the RMC acquisition gave it a strong presence in Europe) and booming emerging market sales, including Mexico, managed to compensate its troubles in the U.S.

So, its vaunted diversification is finally proving its worth. But curiously, Cemex is not the Mexican cement firm you want to be invested in. That honor belongs to Grupo Cementos Chihuahua, a much smaller produccer that has also entered the U.S. market in a big --and much more succesful--way. Just compare the performance of their stocks.