Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. Though building material maker USG (NYSE: USG ) is still suffering from the recession, many investors expect better times ahead.
In our Motley Fool CAPS community, about 93% of the 1,921 investors rating the company are bullish, so there's no shortage of reasons why USG will thrive, three of which I've highlighted below.
But here at The Motley Fool, we're all for looking at both the good and bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below or rate USG yourself in CAPS.
1. Improving demand
While the downturn has taken a toll on USG's markets, the company reported some stabilization and improvement in demand in its latest quarter. The upbeat outlook from major customer Home Depot (NYSE: HD ) also points to improvements in consumer demand for building products. While conditions have yet to return to prerecession levels, other building materials companies are also giving investors hope that a turnaround is near. Commercial Metals (NYSE: CMC ) sees an uptick in nonresidential construction and Cemex (NYSE: CX ) is forecasting growth in cement sales in the U.S. in 2010.
2. Housing uptick
With much of the demand for USG's products coming from new home construction, some investors like the recent positive trends in that sector. Homebuilders Toll Brothers (NYSE: TOL ) , PulteGroup (NYSE: PHM ) , and Beazer Homes (NYSE: BZH ) all reported a jump in orders in their recent quarters and new home sales reached a two-year high in April with help from the homebuyer tax credit.
3. Tighter ship
Like many other companies, USG scaled back operations and slashed costs during the downturn, and expects to benefit when a recovery finally takes hold. With leaner operations and positive signs in the economy, some CAPS members see USG in a good position to take advantage and improve its bottom line going forward.
To see details of what CAPS members are saying now about USG, just click on over to Motley Fool CAPS and have a look. Or add your thoughts directly to this story in the comments box below.
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