U.S. Auto Parts (PRTS) - 518% Gain in 8 Months
This is a trade rationale from a past trade for educational purposes only. For access to our current portfolio subscribe today!
We added PRTS to the portfolio in December 2019 at a price of $2.25. The stock met our valuation and market cap criteria, and was among the top 50 micro cap stocks outperforming the S&P 500 over the previous 12 months.
The stock began to bottom out in the summer of 2018 with several weeks of high volume followed by a loss of downward momentum. We began to see signs of accumulation in the fall of 2018, and it took the stock a year to finally break above the resistance created by that first wave of accumulation.
We removed the stock from the portfolio in August 2020 at a price of $13.91, for a gain of 518%, as the company exceeded both the market cap and valuation limits for the portfolio.
This is a great example of why it’s important to stick to the rules. It would have been very easy to panic and sell during the Covid crash in March 2020, but our discipline in sticking to the rules paid off.
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