This year it should fall to $12.50 after this quarters earnings disaster.
Here are the reason's it hit $25 last year.
1) The 8k tax credit expired on 3/31/1,0 so builders and home owners rushed to take advantage of it. This gave the false preception that housing was in recovery. This year it's getting increasingly difficult to get a mortgage.
Also with the Glut of foreclosures coming on the market, New home construction doesn't have a chance. Don't look for repair and remodeling to save them, as no one wants tto throw more money into a home that's already lost 30% of it's value.
2) USG raised prices and naive builders rushed to build inventory to beat the price increase. Since March 2010, every price increase USG has attempted has collapsed in a matter of days.
3) Numerous market pundants proclaimed the recovery of the housing market, so USG's stock rose even though they reported a massive loss.
With in 60 day's after the stock hit the euphoric peak. It dropped precipitously from $25 to 11.65 by July 1st.
This year we already know housing will tank all the way into 2012, so USG stock should fall even quicker and farther then last year. It all depends if they report a loss more then 100 million again this quarter.
I don't expect Ultralight has a chance, now that the market is flooded with similar Lite products from competitors. With commodity prices rising the way they have, I expect USG to fully disappoint analyst projections. Most companies that have reported thus far this quarter have disappointed investors and I expect USG will do the same.
Next Wednesday you'll realize that I was right and that I could have saved you money if you sold on my advice.
See you Wednesday.
PS: The "New Housing Starts" report come out Tuesday which should set a negative tone for the whole housing market. Being this is already the worst spring for housing in decades.
"My forecast remains the
This year it should fall to $12.50 after this quarters earnings disaster."
We never did hit this target, the lowest we hit this quarter was 12.93, but that's better then the USG long's calls for USG soaring to $20, which will never happen.
same for a 100 million loss on these 6/30/11 financials.
This month the home inventory is at 9.3 moonth over supply. According to CNBC if you add in the Banks, Freddie and Fannie's shadow inventory of foreclosed homes, the over supply is somewheres around 36 to 48 months.
My forecast is for USG's stockholders equity to dwindle from 544 million to below 450 million. This scenario will happen each quarter throughout 2011 and 2012 until USG's stockholders equity is NEGATIVE.
Check out how USG's stockholders equity has dropped over the last 4 quarters.
Watch how the people who bought into USG over the last 5 days on the belief of a housing bottom get burned in July.
Today's existin Homes report shows how far we still are from a bottom.
Almost all of USG's competitors now have some type of new Lite drywall and consequently drywall prices are crumbling.
If you didn't sell yesterday you should today. As USG's stock will trend lower into the summer duldroms.
Stockholders equity was $619 million on 12/31/10 and it's now approxmately $514 million. If USG's losing trend continues, (which I believe it will) stockholders equity will drop to 300 milllion.
PS: the stock market should top out today and trend lower. I suggest you hedge your portfolios with these ETF's that short the major indexes.
TWM,PSQ and SDS.
Scale into these as the market continues a little higher.
"Sell in May and stay away" will happen in April this year.
My reasoning the dollar is seriously getting weaker so commodities wil soar until they strangle the economy. When oil breaks $115 a barrel the stock market will get spooked.
QE2 ends in June and there CANNOT be a QE3 because it would send the dollar into free fall. Also if the gov't raises the debt ceiling this will also weaken the dollar sending the price of oil higher.
Finally, the weekly jobless claims are about to get increasingly worse as teacher Pink slips are handed out at the end of the school year. They recently did this in my school district and laid off hundreds of teacher assistants.
Wait for the market to peak late this morning.
It was good, but not good enough to make up for the 22% drop in Feb.
"March’s new construction was 13.4 per cent lower than a year ago, however, and was still well below the levels seen in a healthy real estate market of a million per year."
"The completions rate fell 14.2 per cent to 509,000, the lowest number on record."
The March 2010 price increase stuck last year, but this year's Feb 2011 price increase quickly collapsed on February's the 22% drop in "New Housing Starts.
Also remember that there was no 8k tax credit this quarter to artificially pump up sales like last year.
You should have sold today, There's no way they can show financial improvement over last year's first quarter. Especially with drywall prices collapsing the way they have.
Short term 3-6month, USG may face a bit pressure, could go to $12 something.
But from a reliable industry source, the industry is getting a bounce this year. This inudustry could bounce up even the housing is still in the tank.
My opinion is the new contruction can see a bounce before the housing as a whole totally recovers.
The really good time for this industry will be 2013, but by that time, the stock price will be north of $50.00. Even this number is a bit conservative.
Just my opinion.
"The really good time for this industry will be 2013, but by that time, the stock price will be north of $50.00"
Not if they continue to lose 100 million each quarter. Let's see how much they lose when the report Wednesday.
Max, don`t you ever get tired of posting the same drivel, Day after Day, Week after Week, Month after Month, Quarter after Quarter, and You still can`t get it RIGHT!
It`s my duty, as THETRUTHSEEKER, to stop by occasionally, and set the record straight, RIGHT!
Have you ever heard of MISINFORMATION!