PSIX Shares Tumbled 20%, Opportunity Or Trap?
Power Solutions International stock has fallen by 20.3% in less than a month, from $115.78 on 9/23/2025 to $92.28 now. Should you buy this dip? Dip buying is a viable strategy for quality stocks that have a history of recovering from dips.
As it turns out, Power Solutions International passes basic quality checks. But the bad news is that it has returned (median) -36% in one year, and 47% as peak return following sharp dips (>30% in 30 days) historically. PSIX provides design, engineering, manufacturing, and sales of internal combustion engines powered by various fuels for energy, industrial, and transportation sectors.
PSIX stock has fallen meaningfully recently and we currently find it attractive. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio (HQ) – HQ has outperformed its benchmark – a combination of S&P 500, Russell, and S&P midcap index, and achieved returns exceeding 91% since its inception. Risk management is key – consider, what could long-term portfolio performance be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.
Historical Median Returns Post Dips
| Period | Past Median Return |
|---|---|
| 1M | -9.6% |
| 3M | 0.0% |
| 6M | -8.8% |
| 12M | -35.8% |
Historical Dip-Wise Details
PSIX had 13 events since 1/1/2010 where the dip threshold of -30% within 30 days was triggered
- 47% median peak return within 1 year of dip event
- 96 days is the median time to peak return after a dip event
- -45% median max drawdown within 1 year of dip event
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| 30 Day Dip | PSIX Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | PSIX | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | -36% | 47% | -45% | 96 | ||||
| 3062025 | -33% | -6% | 258% | 330% | -31% | 201 | ||
| 1242024 | -47% | 6% | 1457% | 0% | 364 | |||
| 3162020 | -34% | -25% | -36% | -36% | 0 | |||
| 12172019 | -32% | 4% | -9% | -9% | 22 | |||
| 10112019 | -30% | 2% | -45% | -45% | 89 | |||
| 5122017 | -33% | 1% | 23% | 0% | 314 | |||
| 12282016 | -42% | 4% | -23% | -66% | 96 | |||
| 8192016 | -39% | 3% | -48% | -77% | 96 | |||
| 1082016 | -33% | -8% | -50% | 41% | -49% | 186 | ||
| 10282015 | -40% | 5% | -51% | 29% | -53% | 34 | ||
| 8062015 | -30% | -1% | -62% | 0% | -76% | 0 | ||
| 12152014 | -31% | -1% | -54% | 54% | -61% | 121 | ||
| 11112011 | -53% | 12% | 30% | 85% | -7% | 144 | ||
Power Solutions International Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 40.1% | Pass |
| Revenue Growth (3-Yr Avg) | 11.1% | Pass |
| Operating Cash Flow Margin (LTM) | 11.8% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 11.9 | |
| => Cash To Interest Expense Ratio | 5.7 |
Dip buying, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.