USG's earnings according to USG's own website.
03/31/09 Net Income was ( -42,000,000) .............. 53% capacity utilization rate compared to 75% the prior year.
12/31/08 Net Income was ( -172,000,000)............. 51% capacity utilization rate.
09/30/08 Net Income was ( -40,000,000)............... 65% capacity utilization rate.
06/30/08 Net Income was ( -40,000,000) ...............69% capacity utilization rate compared to 82% the prior year.
Total loss in the last 12 months (-294,000,0000 )
I doubt USG is running many of it's plants on Saturday and Sunday, being last quarter capacity utilization rate was 53%, so let's remove
So we now have a 260 day year. Now divide the full 12 month loss of (-294,000,000) by 260 and you'll see what they're losing daily (?).
Being USG is probably only running less then 12 hours a day on average. Divide the above daily loss by 12 and that equals an hourly loss of (?)
Ouch.....they're hemorrhaging badly
I believe these estimates may be conservative being some plants "may" have been only running 3-4 days a week over the last 12 months. There maybe some minor variations in my estimates. Maybe you should check their financials for the last 4 quarters and skip their rosey spin on the numbers.
"Friday, August 25th, 2006 | FPF Value, Model Portfolios, Stock Research, Warren Buffett with
Warren Buffett’s Berkshire Hathaway (BRKa) (BRKb) continues to load up on USG Corp (USG) stock this week. Two SEC filings indicate that Buffett added 567,218 shares on Monday (8/21/06) and 390,200 on Tuesday (8/21/06) as the price of USG dropped below $46. Berkshire Hathaway now holds 15,959,292 shares of USG. I won’t be surprised to find out that Buffett purchased more shares on Wednesday since USG also dipped below $46 that day."
-your quoted link was dated august 25, 2006 and detailed purchases made that week... 8/21/2006.
With respect to the link I included do you not understand that Buffett bought the equivalent of 2,631,578 shares of usg common for $11.40/share? With the new preferred issue he bought the shares at a fixed price and didn't have to compete w/opmi's over shr price... and gets paid 10% interest as well while he bides his time on conversion of same.
Your post doesn't make sense.
He bought frequently on the open market back in 2006 and paid $46 a share at the time. The SEC allows him to do his transactions quietly, with out the normal notification that others have to give. So if he was truly interested in USG stock he would have bought it in the first quarter and you would not have known about it for months later.
"Lo and behold, it looks like Mr. Buffett has accumulated more shares of USG Corporation (USG). Over the past quarter, Berkshire Hathaway’s holdings of USG Corp. increased from 16,700,992 shares on September 30, 2006 to 17,072,192 shares on December 31, 2006."
Friday, August 25th, 2006 | FPF Value, Model Portfolios, Stock Research, Warren Buffett with
Warren Buffett’s Berkshire Hathaway (BRKa) (BRKb) continues to load up on USG Corp (USG) stock this week. Two SEC filings indicate that Buffett added 567,218 shares on Monday (8/21/06) and 390,200 on Tuesday (8/21/06) as the price of USG dropped below $46. Berkshire Hathaway now holds 15,959,292 shares of USG. I won’t be surprised to find out that Buffett purchased more shares on Wednesday since USG also dipped below $46 that day.
Obviously at this point Warren Buffett thinks USG Corp is a fat pitch at prices below $46. I wonder how long he will continue purchasing USG when it drops below $46. For now, I’m pretty excited to have Warren Buffett backing my purchase of USG stock.
quicmoves, adeptrader, optionexpert, ddavid, et al...
think about your question....
"I don't know why he wouldn't have bought the other 20% when it was under $10."
-he made a $300mm investment in usg w/a newly created preferred issue that is convertible @ $11.40/share, and he collects 10% interest while he waits. (the option is already in the black)
Do you honestly believe he could've bought below $10/share in the open mkt for long? He's an insider and they're reported almost as soon as he makes the purchase...
Don't play poker w/WEB if you're going to wonder who the dumbest is at the table.... or wonder why he does or doesn't make an investment...
Things to consider,
1. How long can they carry on bleeding cash?
2. How long does it take, for the market to recover? (4 to 8 qtrs)
3. Why shouldn't it be a slow recovery? (Deleverage)
4. Do they need additional capital, to hold on?(until the market stabilises)
4. Will there be more dilution?
5. As they are low cost producers they might survive, but in what form? (re-emerge from chapter 11)
6. Aren't there similar opportunity else where,
with less risk?
I was lucky to get out at 21, with 40% loss. I might buy back this stock, even at a higher price, but I want to see the market stabilise.
I like the management, & the way they are handling the situation. They are in a tough industry, in a very difficult environment, which I think, none have ever faced before.
I have not replied for a long period of time, but must once again speak out. quicmoves is a very negative person.
Many of the other messages look at USG from a realistic point of view, rather than just negative. That being stated, quicmoves may be partially correct in the short term.
Buffet may end up with the company (to the detriment of current stock holders). With Berkshire Hathway's other building product companies, USG would be a great fit. I am certain the their distribution arm (L&W) could easily take on these other building products (nearly 200 locations strong).
I frequently believe that quicmoves was an under-performing former employee of USG. When he lost his job he went to National Gypsum. Of course since he is an employee of National, it could not be in a similar financial condition.
Are you worried about your job?
are people like you, that populate these message boards and blogs with limitless negativity, on somebodies payroll? That isn't an insult, its just curiosity.
One thing that is certain is that USG is faced with utterly unprecedented headwinds. Their volume is shockingly off its highs. But with Q1 2009 being just marginally below Q4 2008 in volume there is some suggestion that a bottom in the volume curve is forming.
And the extraordinary cutback in volume has forced USG to take cost savings actions that will benefit them when/if (almost certainly when) there is an uptick in volume. At this point what is their break even point? 20% higher volume than Q1 2009? 25%?
From even todays prices, forget about the $4 low, USG is basicaly a stock with one of two outcomes. It goes bankrupt and the stock goes to zero, or its a multi-bagger from here in the fullness of time.
I never pretend to know how to predict the short term moves of the market or an individual stock, but in the fullness of time USG will either at least double from here or go to zero.
Does anybody believe BK is on the table?
I don't for USG, and so i'm long and willing to hold and accumulate, or accumulate rapidly if it goes to your predicted price of $5.
Great chain w/ some smart folks on it. Would like your thoughts...
I do believe that the prospect of BK should be considered. I sold out of my long position last week...not due to the immediate prospects of BK, but due to the sweet run, locking in profits, and USG's additional workforce reduction, which to me at least does not signal that the construction market is bottoming anytime soon. But, dazz, nate, checklist, and even quic, I would like to hear your thoughts on the following BK concern:
Buffett (and Fairfax) invested $400MM in a debt security. It pays 10% interest. USG is not making $40MM to pay such interest. I think dazz is right in that Buffett's breakeven under current holdings & conversion is between $30-$40/share. BUT, if the co can't make its interest payment to him, he (and Fairfax) is in a position to credit bid the entire co for cents on the dollar. Then get ALL the upside when the market returns. And, he already owns Shaw Group...synergies potentially huge...and the old man prints $$ when the market returns. But, it would be a privately-held company at that point (more expense reductions after doing away w/ public-company costs) and the current public SH get nothing (unless you buy Berkshire stock).
Despite his charm, I've always considered Buffett a killer. I think he makes a lot more $$ if the co goes BK before the recovery. That's my math worry. Thoughts?