The three stocks in our True Momentum portfolio are currently divided, with one position climbing steadily higher and the other two falling slightly back from their prior levels.
Cognex Corporation (Nasdaq: CGNX), our machine vision company, has soared in recent weeks and is now up a remarkable 20% from when I first recommended it. The reason that the stock is up so high is because the sectors that Cognex participates in on the stock market — industrials and information technology — are both in favor right now. So Cognex is in a good position to see its stock keep going up.
On the other hand, the parts of the stock market that USG Corporation (NYSE: USG), our dominant drywall maker, and Thor Industries (NYSE: THO), our recreational vehicle maker, both participate in are currently out of favor.
Now, when I say that, I don’t mean that both USG and Thor are out of favor themselves because both of these companies are growing very rapidly. In fact, I believe that in only a week or two, we will see Thor Industries, which is currently down by about 16%, turn around and start to climb higher and wipe out our losses. And not only will it turn around, but it will start to make new highs, as will USG.
I know it can be distressing to see your stocks down, but you must remember that companies like USG and Thor are very small and illiquid, which means that it’s easy for market makers to run them down to accumulate stock for themselves. And they do this so that they have the stock in inventory to sell to other people at much higher prices.
This is what I believe to be the reason that Thor Industries and USG are down, but I do not want you to worry about either of these companies. The stocks that we have in our True Momentum portfolio might be more volatile stocks than you’re used to, but I am not seeing anything wrong with either recommendation that would cause me to worry.
Nothing has changed for either one of these companies. Their growth prospects are incredible, and their stocks are going to reflect that. That is what I believe, and that is what I expect to see happening with these stocks very soon.
If you would like a refresher on why I chose each of these companies for our True Momentum portfolio, and the reasons that I see each company growing exponentially in the future, I encourage you to read back through our previous issues. You can find them in our archives online, as well as our ePortfolio.
All you have to do to view those is click on this link:
And as always, if you have any questions for me regarding our trading strategy or our current recommendations, you can send me an email at email@example.com. I may not be able to answer each of your questions individually, but I will try my best to address your concerns in a future update.
That’s all that I have for you today, but I’ll be back to you soon with another briefing.
Editor, True Momentum