Hope You Sold off USG Corporation: No Longer Bullish

Over a month ago I recommended for everyone to sell USG at a price of $24.69, hope you followed through as since then the stock has dropped over $7. Here is what I originally said:

“Back at the end of July 2009, I recommended many readers to buy USG Corporation (USG) at $12 per share.

Originally I liked USG for its long-term potential based upon the future strength of the housing market and the opportunity for numerous new projects to start up offering new business. USG has been effective throughout 2010 due to its ability to cut costs raising profits and leading an upturn in sales.

I still continue to believe USG is an attractive stock however it is now trading at $24.69. That results in a total return of 105% and whenever I double up I always do the same thing. First I recommend that everyone cuts their position in half, play with the house’s money so it doesn’t pose any risk on yourself. The construction and engineering sector still remains bullish, however I don’t feel it’s as strong anymore due to valuations.

The construction and engineering sector still remains bullish, however I don’t feel it’s as strong anymore due to valuations. A year ago the sectors valuations were at historic lows making it an automatic buy similar to the financial and many other stocks a year ago. Now after the recent resurgence I want to invest in best of breed companies, USG is a best of breed company within its sector however I can’t go against my own investing rules part of the reason I am cutting half of my position.”

Long-term I no longer am a supporter of USG Corporation. This is not to say that it might continue to rise slowly I just believe their are better sectors and individual stocks to invest in.