Core Insights - The article emphasizes the importance of a proven ranking system that focuses on earnings estimates and revisions to identify winning stocks [1] - Value investing is highlighted as a popular strategy for finding undervalued stocks using fundamental analysis [2] - The Zacks Rank and Style Scores system are tools for investors to identify stocks with specific traits, particularly in the value category [3] Company Overview: Cementos Pacasmayo (CPAC) - Cementos Pacasmayo currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential [4] - The stock is trading at a P/E ratio of 10.03, significantly lower than the industry average P/E of 23.54 [4] - Over the past year, CPAC's Forward P/E has fluctuated between a high of 13.10 and a low of 7.26, with a median of 8.91 [4] Valuation Metrics - The P/S ratio for Cementos Pacasmayo is 1.08, compared to the industry average P/S of 3.17, suggesting it may be undervalued [5] - These valuation metrics contribute to CPAC's strong Value grade, indicating it is likely undervalued at present [6] - The strength of CPAC's earnings outlook further supports its position as an impressive value stock [6]

Core Viewpoint - The focus is on long-only investment strategies that evaluate companies from an operational and buy-and-hold perspective, emphasizing long-term earnings power and competitive dynamics rather than market-driven price actions [1]. Group 1: Investment Philosophy - The investment approach prioritizes operational aspects and the long-term potential of companies, suggesting that most recommendations will be holds, reflecting a cautious stance in a bullish market [1]. - The company believes that only a small fraction of companies should be considered for purchase at any given time, indicating a selective investment strategy [1]. Group 2: Communication and Disclosure - The articles are presented on an "as is" basis without warranty, representing the author's opinions and not constituting professional investment advice [1]. - There is a clear disclosure that the author has no current stock or derivative positions in the companies mentioned, nor plans to initiate any within the next 72 hours [2].

Financial Data and Key Metrics Changes - The company reported a 9% increase in sales volume compared to the same period last year, driven by stronger demand from infrastructure projects and self-construction [3] - Gross profit increased by 14.4%, and net income also rose by 14.4%, reaching PEN 71.5 million for the quarter, with a cumulative growth of 15.6% for the first three months of the year [3][7] - Revenues for the quarter increased by 10.9% to PEN 574.1 million, with consolidated EBITDA rising to PEN 160.6 million, a 3.9% increase [7][8] - For the first nine months of the year, revenues increased by 7.3%, and gross profit rose by 10.5% compared to the same period in 2024 [8] Business Line Data and Key Metrics Changes - Cement sales increased by 10.4% this quarter, with gross margin up by 1.6 percentage points due to lower costs of coal and energy [9] - Concrete pavement and mortar sales surged by 26.3%, primarily due to infrastructure projects, with gross margin increasing by 2.6 percentage points [10] - Precast materials sales rose by 23% this quarter, with gross margin higher by 5.6% compared to the same period of 2024 [11] Market Data and Key Metrics Changes - The northern region of Peru is experiencing growth above the national average, with expectations for continued strong activity in infrastructure projects [16] - The company does not anticipate significant impacts from upcoming elections on self-construction or infrastructure projects, as historical trends show resilience during electoral periods [22][23] Company Strategy and Development Direction - The company is focused on innovative building solutions, including prefabrication and BIM methodology, to enhance efficiency and sustainability in construction [4] - Collaboration with Newmont and Bechtel Corporation on a water treatment plant project highlights the company's commitment to environmental sustainability [5] - The company aims to maintain a strong market position through increased marketing expenses to defend its market share [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining strong volumes and margins despite potential electoral impacts, emphasizing the importance of ongoing investment and innovation [22][23] - The company plans to keep sustaining capital expenditures around PEN 100 million, with a steady dividend of PEN 190 million announced for the year [19] Other Important Information - The company ranked among the top 10 in the Merck Corporate Reputation Ranking for the third consecutive year, reflecting its commitment to responsible management [5] - The net debt-to-EBITDA ratio stands at 2.5x, indicating a solid financial position due to higher EBITDA and debt amortization [11] Q&A Session Summary Question: Expectations for volume performance ahead of federal elections - Management noted that the northern region is growing above the national average and does not expect significant impacts from the elections on volumes [16][17] Question: Capital allocation and CapEx performance for 2026 - Sustaining CapEx is expected to remain around PEN 100 million, with dividends maintained at PEN 190 million [19] Question: Adjustments to commercial strategy during electoral cycles - Management disagreed with the notion that electoral cycles lead to pauses in investment, emphasizing the need for continuous growth and market share defense [22][23] Question: Explanation for the increase in financial income - The increase in financial income to $8.7 million was attributed to mining royalties, which provided extraordinary income [26] Question: Future margin expectations - Margins are expected to remain steady despite volume growth, with increased marketing expenses to defend market share [29]

Financial Data and Key Metrics Changes - The company reported a 10.9% increase in revenues for Q3 2025 compared to Q3 2024, reaching S/574.1 million, driven by higher sales of concrete and pavement for infrastructure projects [9] - Gross profit increased by 14.4% year-over-year, attributed to a decrease in raw material costs and higher revenues [9] - Net income for the quarter rose 14.4% to PEN 71.5 million, with a cumulative growth of 15.6% for the first nine months of the year [4][13] - Consolidated EBITDA was S/160.6 million, a 3.9% increase compared to the same period in 2024 [9] Business Line Data and Key Metrics Changes - Cement sales increased by 10.4% in Q3 2025 compared to Q3 2024, driven by increased demand [11] - Sales of concrete pavement and mortar surged by 26.3% in Q3 2025, primarily due to infrastructure projects [12] - Precast materials sales rose by 23% in Q3 2025, with a strong increase in sales of pavers [13] Market Data and Key Metrics Changes - The northern region of Peru is experiencing growth above the national average, with strong activity in self-construction and infrastructure projects [17] - The company anticipates that the upcoming elections will not significantly impact volumes, as historical trends show resilience in the market during electoral periods [18][25] Company Strategy and Development Direction - The company is focusing on innovative building solutions, including prefabrication and BIM methodology, to enhance efficiency and sustainability [5] - Collaboration with Newmont and Bechtel Corporation on a water treatment plant project highlights the company's commitment to environmental sustainability [6] - The company aims to maintain a client-centric approach while adapting products and services to meet current and future demands [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued positive results and momentum, emphasizing the importance of doing what is right for clients and communities [7] - The company expects strong volume performance to persist, with optimism for growth in 2026 despite potential electoral impacts [28] Other Important Information - Administrative expenses increased by 20.2% in Q3 2025, primarily due to higher personnel costs related to union bonuses [10] - The net debt-to-EBITDA ratio was reported at 2.5 times, reflecting improved EBITDA and debt amortization [14] Q&A Session Summary Question: Expectations for volume performance ahead of federal elections - Management noted that the northern region is growing above the national average and does not foresee significant impacts from the upcoming elections on volumes [17][18] Question: Capital allocation and CapEx performance for 2026 - Sustaining CapEx has remained around S/100 million, and the company plans to maintain this level [21] Question: Dividend expectations for 2026 - The board decided to keep the dividend at S/190 million, aligning with previous years despite expected net profit growth [21][22] Question: Adjustments to commercial and operational strategy during electoral cycles - Management disagreed with the notion that electoral cycles lead to pauses in investment, emphasizing the need for continuous operation and investment [24][25] Question: Explanation for the increase in financial income - The increase in financial income to $8.7 million was attributed to the resolution of mining royalties, resulting in extraordinary income [28]

Company Overview - As of September 2025 LTM, Pacasmayo's cement shipments reached 2.9 million MT[4] - The company has a combined cement production capacity of 4.9 million MT/year and a combined clinker production capacity of 3.08 million MT/year[20] - 72% of the company's retail customers are socioeconomic level CDE, 25-55 years old[23] - Approximately 70% of the company's sales are represented by 271 store owners and 320 points of sale under the DINO brand[36] Financial Performance - Sales of goods reached S/ 2,084.0 million, a 6.2% increase compared to LTM September 30, 2024[6] - EBITDA reached S/ 568.0 million, a 0.9% increase compared to LTM September 30, 2024[6] - EBITDA margin was -4.9 percentage points compared to LTM September 30, 2024[6] - Cement sales accounted for S/ 1,687.93 million of the total sales of goods[40] Market Overview - Pacasmayo has a 22.9% share of the Peruvian cement market in the Northern Region, with shipments of 2.964 million MT as of August 2025 LTM[13] - The total cement market in Peru reached 12.948 million MT as of August 2025 LTM[13]

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Core Insights - Cementos Pacasmayo S.A.A. reported consolidated results for the third quarter and the first nine months of 2025, highlighting growth in sales volume and revenue driven by increased demand in the construction sector [1][5]. 3Q25 Financial and Operational Highlights - Sales volume of cement, concrete, and precast increased by 9.0%, attributed to higher sales for infrastructure projects and increased demand for bagged cement [5]. - Revenues rose by 10.9%, consistent with the increase in sales volumes [5]. - Consolidated EBITDA increased by 3.9%, reaching S/160.6 million, primarily due to the revenue increase [5]. - Consolidated EBITDA margin was 28.0%, reflecting a 1.9 percentage point decrease due to higher personnel expenses from a negotiated union bonus [5]. - Net income was S/71.5 million, a 14.4% increase, driven by higher operating income, increased financial income, and lower interest expenses due to debt amortization [5]. 9M25 Financial and Operational Highlights - Sales volume of cement, concrete, and precast increased by 6.8%, mainly due to higher demand for bagged cement and infrastructure projects [5]. - Revenues increased by 7.3%, aligning with the sales volume growth [5]. - Consolidated EBITDA rose by 4.6%, reaching S/425.5 million, driven by increased demand [5]. - Consolidated EBITDA margin was 27.3%, consistent with the same period last year [5]. - Net income increased by 15.6%, reaching S/172.0 million, attributed to higher operating income, increased financial income, lower interest payments due to debt amortization, and favorable foreign exchange effects [5]. Company Overview - Cementos Pacasmayo S.A.A. is a leading cement company in Peru, producing and selling cement and related materials, with over 67 years of operational history [7]. - The company is listed on the New York Stock Exchange under the ticker symbol "CPAC" and serves the rapidly growing construction sector in Peru [7].

Core Points - Cementos Pacasmayo S.A.A. announced a cash dividend of S/ 0.41 per common and investment share [1] - The total dividend amounts to S/ 190,300,410.65, which is related to retained earnings as of December 31, 2014, and results from 2015 to 2024 [1] - The dividend approval was made by the Company's Board of Directors during a session held on October 21, 2025 [1]

Core Insights - The article emphasizes the importance of the Zacks Rank system, which focuses on earnings estimates and revisions to identify strong stocks [1] - Value investing is highlighted as a favored strategy that seeks to find undervalued companies using various valuation metrics [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly in the Value category [3] Company Analysis: Cementos Pacasmayo (CPAC) - Cementos Pacasmayo (CPAC) is currently rated with a Zacks Rank 2 (Buy) and has a Value grade of A [4] - The stock has a Forward P/E ratio of 9.84, significantly lower than the industry average of 24.26 [4] - Over the past 12 months, CPAC's Forward P/E has fluctuated between a high of 13.10 and a low of 7.26, with a median of 8.91 [4] - The P/S ratio for CPAC stands at 1.12, compared to the industry average of 3.35, indicating potential undervaluation [5] - These metrics suggest that CPAC is likely undervalued, supported by a strong earnings outlook, making it an impressive value stock [6]

Company Performance - Pacasmayo (CPAC) has gained approximately 22.6% year-to-date, outperforming the average return of 6.9% for the Construction sector [4] - The Zacks Consensus Estimate for Pacasmayo's full-year earnings has increased by 9.2% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [3] - Pacasmayo is currently ranked 2 (Buy) in the Zacks Rank system, which focuses on earnings estimates and revisions [3] Industry Context - Pacasmayo belongs to the Building Products - Concrete and Aggregates industry, which includes 6 stocks and is currently ranked 99 in the Zacks Industry Rank [5] - Stocks in the Building Products - Concrete and Aggregates industry have gained about 14% year-to-date, with Pacasmayo performing better than this group [5] - Worthington Enterprises (WOR), another Construction stock, has returned 60% year-to-date and belongs to the Building Products - Wood industry, which is ranked 227 and has moved +9.6% this year [4][6]