USG Corp (NYSE:USG)

Beaten down over the past year. Buy it now at 46 and change.

Unique position in the building industry that will not be easily replaced. Low stock price reflects current building downturn.

As housing market rebounds this stock will also. Current price reflects gloom and doom surrounding "down" housing market that is poised for a spring jump.

hey, warren likes it. where are you sitting now? look at the wall. is it wallboard? get a clue!

in the world of dumpster diving, this is it. probably at the top of the dumpster - didn't have to move too many bags and pizza rinds. just had to open it up and voila, there it was. maybe 2/3 of my picks still have carrot peels and dried kleenex stuck to them. ewwwww.....

1. Returns are strong with ROE averaging 35.9%, and ROTC averaging 26%

2. Earnings per share have been eratic, to say the least, with several factors contributing including payment of debt, asbestos lawsuites, bankruptcy etc. (See Fools Insider News Letter: http://www.fool.com/newsletters/14/issues/html/2007/12svq469/02.htm)

3. Over the past 16 years the average CAGR for USG has been around 3%

4. Our debt ratio produces a 10 year average of only 1.13, meaning that USG could afford to pay off all of its debt in just over a years operating revenue

5. Price to Earnings of 8.3 is low compared to the industry average of 19.8

6. Value Line has projected a 3 - 5 year growth rate of 2 - 14%. This I find to be too conservative. I have increased my valuation to 10% on the low and 15% on the high. The Present Value of OE ranges from $2.52 to $3.93 compared to current OE of $2.52. Using a P/OE ratio of 18.5 (the current level and close to industry average) A present fair value for USG can be estimated at $46.53 to $72.57, resulting in a discount range of 0 to 56%.

Interesting articles:
http://learningtoinvestinvalue.com/Documents/Texas%20Hedge%20USG.pdf

Bad housing starts. Subprime blow up. 8% dilution from stock issuance. Strong enough to withstand this onslaught and will sail WHEN the rebound begins.

It is so out of favor but L&W Supply will be a great growth vehicle. Housing will rebound faster then everyone thinks.

USG is a quality run company and quality will always win once the housing hesteria subsides.

ready to buy at $47

Once housing turns up, so will USG.

USG has been turning around and is the most competitive in its industry. Price continues to suffer because of the out of favor slump in the building industry. Now is the time to buy. Don't look for a quick upside here, it will take awhile before the market realizes this one is undervalued. The building market isn't dead and new home construction isn't the only thing USG depends on for profitability.

Most believe that this stock will continue moving downwards, but this is the best of breed in this industry. Value investors will be moving in to snatch more of this company up as it moves down and it is already at the levels where Buffet bought a ton of stock back a few months ago ~ $46/share. Subprime/housing issues wont go away for at least another 6 months, but this stock should have much support around this level. Look for Buffet to be buying more stock or even buying it completely as its price moves down.

It is next to impossible to try to figure out where the bottom of a stock will be, especially so since the share prices of stocks usually account for what everyone already knows (i.e. the economy is slowing, people have less access to easy money to buy houses, and decreasing number of new homes being sold). The FED WILL drop rates in May inorder to save this economy from moving into a recession - do u truly think the democrats will allow such a thing to happen???- and will prop up housing and related stocks.

The Fed does not care about the stock market. The Fed does not care about the fact that many subprime lenders are going under and will drag others down with them. They do care about the average American citizen, and when they are being kicked out of their homes and onto the streets. The fed will react in may when foreclosures are ramping and the value of homes are diving due to oversupply. We are only beginning to head down the steep slope of this historic parabolic housing bubble.

The black clouds are not moving out yet, but they will soon enough!

This is a leader in home construction/renovation services. The housing slowdown, along with recently settled asbestos liabilities, has rendered this company’s stock price dirt cheap when weighed against its prospects going forward. Oh, and did I mention Buffet owns about 20 percent of this company?

Dominant and well-managed company, even if its business is very cyclical. I think USG is trading at a normalized P/E of 15 or so. This is not dirt cheap, but it is a good deal considering how well run USG is. The next couple of years might be rough depending on how bad the housing bust gets, but USG should be a good investment over a longer timeframe.

everybody loves it, and good technical chart

Lowest cost producer. Strong management. No debt. USG is well-positioned even if the housing downturn accelerates. Last Warren Buffett bought-in around $46, so I will too.

Good ROC.

Essential product for any building, commericial or residential. Will bounce up on next cycle. Good dividend. And Warren Buffet likes it.

two words, sheet-rock!