This week, I want to give you a brief update on how each of our positions are doing and take a closer look at a just-released announcement that spells great news for our position in USG Corporation (NYSE: USG), which is the dominant maker of drywall.
Let’s get to it…
Just today, the National Association of Realtors announced that, compared to February of last year, housing sales are up by 5%. And that’s on top of a 3.8% gain in January. So this is a very strong trend that’s going to benefit USG going forward.
The stock is currently up by over 3%, and I expect it to continue to go higher as we see housing sales tick up. Remember that the next housing boom will be seeded by the millennial generation, and I believe that with this just-released information, we are already beginning to witness signs of this next growth period taking shape.
The millennial mega trend is one of the dominant themes that I track in my Profits Unlimited service, and I will continue to monitor how this trend impacts the growth potential of USG.
Moving on, Thor Industries (NYSE: THO), which is our recreational vehicle maker, is currently down by about 14%. As I explained to you two weeks ago, smaller and more illiquid companies — meaning companies that don’t have a lot of shares that trade every day — tend to experience a backing-off effect after they release their earnings reports.
This is exactly what we’re seeing with Thor Industries.
While the company announced good earnings and the stock held its position for a while, market insiders are using the lack of stock trading in the postearnings period to balance their books out.
And what I mean by this is that market makers will run the stock down to accumulate stock for themselves, knowing that a company like Thor is strong with huge numbers behind it. They’ll do this so that when they go to push the stock up and people want to buy it, they’ve got stock to sell.
That’s what I believe is happening, but I also believe that Thor has finished going down and will soon start to climb back up again. Its stock is currently trading at just $95 a share, so if you haven’t bought in yet, I would recommend that you get into the stock now while it’s still cheap.
Lastly, Cognex Corporation (Nasdaq: CGNX), which is our machine-vision stock, reported its earnings some time ago, and the company looked great. This is a stock that’s been going up — we actually saw it go up by as much as 15% before backing off some — and it’s now sitting at a 12% gain.
Remember that we track medium- to small-sized companies in True Momentum, and that some level of volatility in a stock like this is completely normal. These companies are easy for market insiders to move around, and sometimes these stocks can fall by 5% or 10% very quickly if the insiders decide that they want to push the price down.
That’s the primary reason that we’re experiencing the volatility that we are. However, this is not unusual, and I don’t want you to lose sleep over this.
So far, I’m happy with the way that our three stocks are shaping up.
I want you to be aware that True Momentum will officially launch in April, so be on the lookout for updates and related materials that will be complimentary to this service.
In the meantime, you can visit the subscription archives and the ePortfolio by clicking on this link:
That’s all I have for you today. I will be back to you soon with more information.
Editor, True Momentum