Wednesday, May 2, 2007

Owens Corning (OC) Earnings Call Notes & A Lesson

From the Call:

  • Roofing business will see a resurgence "soon"
  • Housing market has become a "bit more pessimistic" and may be a bit slower for a little longer but, second half seasonality of OC's business will see a improvement (45% 1st half, 55% 2nd half).
  • Sign's are out there that they market may have bottomed and is improving in certain areas.
  • A prolonged housing slowdown will not affect this years results (as long as there is no further dramatic deterioration)
  • Current housing downturn was unlike any other as it was very dramatic and was not caused by overall deterioration of the economy and commercial business was not affected materially.
  • Insulation sales are picking up
  • 07' sales should mirror '06 and improve throughout the year
  • Roofing inventory has been built in Q1 when asphalt prices are low (new strategy)

A Lesson:
Did you panic today after the earning were announced? A whole bunch of people did as shares dropped $1.57 each in the first 4 minutes of trading on volume 40,000 shares. Those folks then watched as shares immediately climbed out of that hole and ended the day up almost 20 cents for a $1.77 swing. Us "long termers" maybe picked up few more shares when they went on sale this morning? Kudos to you if you did!!

Today was a perfect lesson for us. Those with short term outlooks will get burned time after time by news and those of us with long term perspectives will use those very instances to by more shares on sale and ad to our gains.....

Great day today...

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