In mid-December, we recommended shares in a company where our strategy has made money several times.

This is one of the strengths of having experience. It makes it possible to repeatedly return to winning companies' stocks and take advantage of weaknesses.

Just a month and a half into buying the position, we have almost a +20% return. Time to cash it in!

Here is the update…

 The company is Guidewire Software Inc. (NASDAQ: GWRE). They have a software platform that provides services to property and casualty (P&C) insurance carriers globally.

Over the last few years, the company has posted a nice combination of earnings growth, beating estimates, and positive revisions.

Here is a stock price chart along with the relative strength index ("RSI") …

The stock hit new all-time highs late last year and reported blow-out earnings. Unfortunately, expectations were even higher, and the stock sold off on the solid earnings report.

This is a situation we have seen many times before. A company beats with strong growth, and numbers go higher, but STILL, the stock trades off in the near term.

Most of the time, you want to buy these types of situations. We have done so in the past with GWRE, and we recommended doing it again.

The stock began recovering at the start of 2025 and was added to the S&P MIDCAP 400 index last week. This led to a sharp rally in the shares.

The stock has now recovered all of its losses and is again pushing to new all-time highs. It is time for us to cash in on this profitable bet!