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USG Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of building-materials supplier USG (NYSE: USG  ) fell more than 12% in early trading on a 50% increase in volume. The stock closed off a little more than 10%.

So what: Not even a month after buying in, Big Money investors appear to be selling in the wake of a lousy third-quarter earnings report. Management cited low demand in explaining a $0.48-per-share miss two weeks ago.

Now what: I'm usually reluctant to bet against a Warren Buffett holding -- and Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) continues to own more than 16% of USG's shares outstanding -- but there's little to like about the company's numbers or projections. Analysts see losses persisting through at least 2013, according to S&P Capital IQ. Do you agree with them? Would you buy shares of USG at current prices? Please weigh in using the comments box below.

Interested in more information about USG? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Berkshire Hathaway at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns , and Motley Fool newsletter services have recommended buying, shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 01, 2011, at 10:56 PM, Viyyaman wrote:

    The new 3/4" wallboard is lighter and more efficient and should do very well. USG will surprise.

  • Report this Comment On November 03, 2011, at 7:52 AM, Samskiman wrote:

    I bought some at about $8.50 on Tuesday, sold the January 2012 $9 call for a bit more than a $1.00.

    Would not have considered touching it without Berkshire's strong investment.

    Good to see the comment from Viyyaman regarding that new wallboard product.

  • Report this Comment On November 10, 2011, at 11:56 AM, Doris411 wrote:

    My holding in USG is at a significant loss, but I'm going to hold onto it.

    New home construction may not rebound quickly, but there's only so much you can defer maintenance. Especially on foreclosures, the banks will have to bring the properties back up to code if they want to have any hope of selling them. Anyone wanting to sell a house needs to make it look its best.

    There are always natural disasters requiring major rebuilding and repairs, too. Not that I'm wishing anyone bad luck, but storms happen.

    So these may not be USG's best years, but I'm confident they will survive to thrive another day.

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