It may prove difficult to value a company that habitually loses money. Companies in their infancy phase, when they reinvest everything into growth, often operate with negative margins. They believe current investment into growth will pay off in the future, much like Starbucks in the 1990s. Other companies, ones that are asset intensive, also operate losing money much of the time. 
Instead of building new retail locations, asset intensive businesses, like USG Corporation, a manufacturer and distributer of building materials, spend money on constructing manufacturing facilities. So, how might an investor go about valuing a company that has unpredictable earnings?
Since earnings based calculations may not work, the enterprising investor must develop other ways to measure a margin of safety. One of these methods is an asset based valuation.
Observe below the value of USG Corporation's Property, Plant & Equipment. This is a specific number that shows the actual dollar amount of PP&E this company owns.
Seeing a chart of PP&E means nothing unless we connect the dots. It helps to think like an owner. How much is the market charging for that PP&E? Using Gurufocus.com, one would plot the PP&E on a per share basis and overlay price.
Identifying the divergence between price and PP&E, one can see the value Warren Buffett (Trades, Portfolio) was offered when buying USG. The further price is below the company's Property, Plant and Equipment "Crown Jewels," the bigger the margin of safety. Further above the green line, the more the market is paying for PP&E.
Think like an industrialist. How much does it cost to build a manufacturing plant? How much does it cost to buy a used one? Get familiar with these numbers and then sit patiently to find when the value of a publicly traded company's assets are selling for much less than building new or buying used.
Be like Buffett. Buy like Buffett.
Thanks to Gurufocus for the USG Interactive Charts.
