USG Corp (NYSE:USG)

grossly undervalued

Buffett is buying, so am I. Levered to housing (that's the scary part).

Good numbers. Liked by Mr. Buffet

Looking long term, is their a better time to buy a stock than when it is at it's bottom.

Recently sliding down to near mid-40's level where Warren Buffett is expected to buy more. On March 14th, 2007 - a possible, short-term high-volume bottom? Maybe the fear of the housing/mortgage crisis is over done, so this is on the discount rack now?

USG Corporation, through its subsidiaries, manufactures and markets gypsum and related products in the United States, Canada, and Mexico. Its gypsum products are used in various building applications to finish the interior walls, ceilings and floors in residential, commercial, and institutional construction, as well as in certain industrial applications.

The fate of the company looks precariously hinged in 2007 as the housing market in U.S is undergoing a sharp slowdown. Housing starts that have been the major source of demand for the company’s product and services have dipped by 20% in 2006. The gypsum wallboard is the biggest driver for companies’ ‘North America Gypsum’ segment, which contributes 53% to the revenues. However, looking at the weak market sentiments, management expects demand for wallboards to plunge by about 7% in 2007.

The fourth quarter performance do not impress as revenues dipped by 3% owing to industry deceleration that resulted in lack of demand. Wallboard pricing has declined in the late fiscal 2006 and management expects these woes to continue in ‘07, which could affect their bottom-line. Excess wallboard production capacity industry-wide is taking its toll on the earnings and company anticipates one billion square feet of additional capacity by the end of 2007.

Additionally, prices of natural gas which is one of the major input cost for the company is likely to rise in the future due to increase in its residential and industrial consumption in the U.S. In 2006, USG has expanded its geographical reach by making acquisitions to grow its distribution business. However, the unsupportive market conditions would not enable the company to realize the benefits in the near future. Considering these elements, the stock does not make a sound investment proposition.

Yo Warren, you think they'll still have walls in 2036.

I'm betting on it, Johnny.

I think that open architecture is actually quite interesting and should make strides in the future.

Well, whatever you say MR. Killz... I'm pretty sure they made walls 50 years ago and I"m fairly certain people will be making walls 50 years from now...

... and since there'll be more people around then, that means more walls. Brilliant, sir!

Well, Johnny however you arrive at that conclusion. I'll be here to pickup any shares you might want to part with at 47.50... you know just in case you think that open architecture thing'll catch on or in case you invent some ultracheap 32 square foot smooth durable insulating and dont forget cheap wall material.

this is a play for a long term gain.

BIll Mann thinks it's good. That's enough for me.

Riding the Buffett train. Earnings were low, so this quarter will be quiet. But after that, great things will happen. Don't forget, when you lose money one year, you carry those losses forward on your taxes. Those carrovers will be huge for 2007's taxes.

Undervalued.

Gypsum is major buioding material, and usg is at a value price. USG just completed a deal with
atlantic board and is expanding its activity with a new plant in Canada.

Recently nailed by the housing slowdown. With a market cap of ~5B, a low P/E, necessary product and backers like Buffett, this seems like the quintessential buy-and-hold. Value play right now, but I expect steady and, at some point, strong movement back up once the market becomes rational again and realizes this company ain't going away.

When the housing market turns around, look out.

Since coming out of BK, this co has performed quite well. The bottom of the housing market, June-Sept 2007, should really boost the stock price of USG. Personally bought in @ $49 ish. Still like the upside.

If it is good enough for Buffet, it is good enough for me.

From a value proposition, stock's return on capital is high (I estimate under normal circumstances 20% plus) and p/e relatively low. There's been a lot of bad press with the asbestos and housing market, but generally the company under normal circumstances should generate $800 million/yr earnings. Once the market figures it out, price should get back to $100 or so (suspect Buffet

Buffet Lemming . . . ; )

I don't see significant gains until at least 3Q08.