One of the members of the final shortlist, covered in BoomBustBlog quite profitably in early 2009, is USG. It is directly tied into the housing market through starts and renovations, as well as the commercial real estate market through new construction. Anyone who has followed me for any significant amount of time knows that I have declared all of those markets to be practically dead since 2007 and to remain so for the foreseeable future. Reference As I Made Very Clear In March, US Housing Has a Way to Fall:
The government incentives are just market interference and pricing distortions, prolonging the pain: It’s Official: The US Housing Downturn Has Resumed in Earnest
Let’s take a look at some charts sourced from the upcoming BoomBustBlog subscriber “A Fundamental Investor’s Peek into the Alt-A and Subprime Market”should be released withing 24 hours or so. This release will include all of the raw data necessary for users to run their own calculation and draw their own conclusions. update, which
As for the commercial real estate market (a topic wherein I have a particularly rigorous update coming up), my opinions can be found in depth here: Commercial Real Estate is Pretty Much Doing What We Expected It To Do, Returning to Reality:
Moody’s has released data that shows CRE has fallen for a second straight month. Thus far, things are rolling along exactly as we anticipated in our CRE 2010 Overview (2.85 MB 2009-12-16 07:52:36), available for free download.
So, where does this leave USG? Well, as elaborated back in 2008...
and on page two of said analysis...
And page 3...
Much of the scenarios that contributed to the short thesis then are still present now, save the fact that the US government has practically shot its wad in an attempt to artificially support the housing market and the municipalities in the US and sovereign states abroad have taken on so much debt to participate in this business cycle "rejiggering" that they will be literally crowding out the private sector in the near future and putting upward pressures on interest rates at a time when many entities are still quite fragile, the US and much of (austerity suppressed) Europe enters a double dip recession (see the Pan-European Sovereign Debt Crisis for our early and accurate calls on that malaise), and the housing market resumes its downward spiral...
Lest we forget, we also finalized our financial short scans as well, and have picked 3 companies out of roughly 180. All three are members of the original Doo Doo 32 of May 23, 2008, which goes to show that the good times from 2008 are probably due to return sometime soon.
Again, Professional and Institutional Subscribers can download the source document which contains all 23 of the shortlisted, short list companies in order of preference, including what we consider the 10 finalists, here Financial and Non-Financial Short Scan Review & Analysis - Pro (392.88 kB 2010-06-28 05:33:44).
Subscribers are free to use the ample fundamental data in the blog posts inline spreadsheets (see sidebar above) to retrace our logic or perform their own analysis to come to an alternate conclusion. Annual Retail subscribers and any subscribers who have been with me for a year ore more can email customer support for a copy as we show our gratitude for you continued patronage.