Here's the news. It doesn't seem that bad. I'm surprised at the magnitude of the drop....
"Wallboard price increases showing signs of slippage, says Cleveland Research
Cleveland Research's checks indicate wallboard prices are slipping in certain regions. The firm said weakness is more prevalent in the East and appears to be relatively healthier in the Western half of the U.S. The firm said checks have a favorable read through for Eagle Materials (EXP) and USG Corp (USG) but the issues could pressure multiples and prevent 2014 price increases and announcements."
USG control wallboard prices and they are the market leader. Wallboard is in every home, office building and ceiling. They are 2-3 times more leveraged to the wallboard market than EXP so they tanked big today. Big dips on this name MUST be bought for the true long term investor. If wallboard prices are slipping then so is demand but that means price spikes will occur in the future and the stock price will reflect that - if this is a true recovery. I've sold many many times into the spikes but I buy the dip every time and I bought the dip today. The only reason to stop buying these dips would be a reversal of the housing market uptrend. I am a realtor now and that is not what I am seeing. Homes are being built everywhere around me and demand is strong.
So congrats to you if you have been short this stock but I am just looking at it as an opportunity.
Why wouldn't wallboard prices fluctuate? This is a good buying opp for lon-term investors. The key are housing starts ...... pricing will increase over time as demand continues. Tough to be a USG investor but I'm holding and buying this dip.