Investing in USG
Several weeks ago I began to closely follow USG when I and the rest of the world heard that Warren Buffett had significantly increased his ownership of the company. After all, Warren Buffett is one of the great investors, so when he makes an investment, people take notice.
USG is an interesting company. Earlier this year it finally emerged from bankruptcy as it finally began to shed the asbestos liability that has been dogging it for years. Just as this huge dark cloud was being lifted - the real estate bubble began to let off some steam and all companies in the housing industry began to pay the price. This certainly appears to have created some opportunities for investors.
USG is one of the largest wallboard suppliers in the US. They even own the "Sheetrock" brand name that is perhaps a more common name for the gypsum board that is the de facto interior walling material for residential and commercial structure.
Here are some additional nuggets:
- Jim Cramer rates USG a triple buy; cheapest stock on NYSE
- Seekingalpha suggest that the future fully diluted EPS is $7.32. Thats roughly a 15% return (to the company) on your investment at current prices.
- George at FatPinchFinancials also recently concluded that USG was a fat pinch.
I decided I was ready to invest and I was pretty much down to two options - my existing Sharebuilder account (with $4 purchase fees), or a USG company-sponsored DRIP ($10 account setup fee, free optional min. $100 investments). While the company-sponsored DRIP was initially more expensive, it allows me the flexibility to make ongoing ($100 or more) investments on USG for no cost. I decided to open the DRIP with a $510 investment and would add to my position as the stock became more attractive.
I was able to fill out the application online at Computershare and purchased 10.15 shares at $49.26/share.
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