Excerpt from our Wall Street Breakfast, a one-page summary of the key market-moving and stock-moving stories of the day:
Buffett Sees Value in Beaten-Down USG [Barron's]
Summary: Although USG Corp. (NYSE:USG) has been devastated because of general bearishness on housing, Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) spent $17.1 million to purchase 371,200 shares of the company, increasing its stake in USG to 19%. Lon Juricic, founder of StreetInsider.com, believes that the fact that the stock is down is the very reason America's most celebrated stockholder is buying up shares so aggressively. USG, which invented wallboard and ceiling tile, reached its record high of $94.22 in April after emerging from bankruptcy and settling its asbestos litigation; since then it has fallen to $48 because of the downturn in housing. Still, USG has 20% operating margins, 25% profit margins, and strong revenue growth and there are those who see Buffett's purchase as a sign of good times ahead for USG.
Related links: Lon Juricic: Buffett Grows Stake in USG Corp. to 19% • Warren Buffett Knows Something About USG Corp. • Building a Case for USG Corp • Buffett Continues to Buy Shares of USG Corp
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