Reflecting upon the very different world that we inhabited just six months ago, I am struck by the profound ways in which Fools have been forced to change their expectations and measure success in completely different ways.
For the intrepid group of value investors who have opted to ride out this Category 5 storm with shares of USG
I won't spend long gazing into the wallboard specialist's operational results ... suffice it to say they were horrendous. USG lost at least $172 million for the fourth quarter of 2008, compared to a $32 million loss a year earlier. Selling and administrative costs as a percentage of sales rose as a result of lower volumes, while interest costs on the company's mounting debt climbed higher as well. This is USG’s fifth consecutive quarterly loss.
Further curbing expectations, USG reminds us that a massive goodwill impairment charge of as much as $226 million remains imminent. At this stage, with new housing starts at their lowest level in at least half a century, and homebuilders like Toll Brothers
With 17% of shares, value guru Warren Buffett counts among those investors with an interest in USG's survival, and he did his part recently as Berkshire Hathaway
The bottom line is that for companies within the hardest-hit sectors of the U.S. economy -- like housing, finance, heavy industry, and the woeful realm of consumer-discretionary spending -- I believe viability will replace profitability as the operative word until glimpses of recovery come into view.
While one could argue there is deep value in a company like Century Aluminum
Nearly 1,800 members of Motley Fool CAPS, including 355 All-Stars, expect three-star pick USG to outperform the S&P 500. Whether you think USG has the "eye of the tiger" or one foot in the grave, I know Fools would like to know your thoughts on this and other companies.
Fool contributor Christopher Barker wonders whether gypsum wallboard was invented by gypsies. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns no shares in the companies mentioned. USG and Berkshire Hathaway are Motley Fool Inside Value recommendations. Berkshire Hathaway is a Motley Fool Stock Advisor selection. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days.
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