USG's Shares Surged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of gypsum products maker USG (NYS: USG) jumped as much as 10.8% in heavy morning action.

So what: Investors are heaving a huge sigh of relief as strong Black Friday retail sales seem to signal that the purse strings of Americans are finally loosening up. USG is a global business but more than half of its sales come from domestic buyers -- mainly through largest distribution partner Home Depot (NYS: HD) . Hence, the American retail climate has an outsized effect on this company's prospects.

Now what: Mind you, it's a bit early to call a turnaround for USG at this point. The company is swimming in debt and burning cash quarter by quarter, and is trading at a measly 0.3 times trailing sales for good reason. But Berkshire Hathaway (NYS: BRK.B) guru Warren Buffett owns a big stake in the company, and he rarely bets big on surefire losers. USG may deserve a second look, but wouldn't exactly take out a second mortgage in order to finance a big buy here.

Interested in more info about USG? Click here to add it to My Watchlist.

At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of The Home Depot and Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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