Question 1: Is the expected return for Schlumberger stock higher after a drop?
Consider two situations,
Case 1: Schlumberger stock drops by -5% or more in a week
Case 2: Schlumberger stock rises by 5% or more in a week
Is the expected return for Schlumberger stock higher over the subsequent month after Case 1 or Case 2?
SLB stock fares better after Case 2, with an expected return of 1.4% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an expected return of 2.5% for Case 2.
In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.
Try the Trefis machine learning engine above to see for yourself how Schlumberger stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold Schlumberger stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you - at least if the company is otherwise strong.
Overall, according to data and Trefis machine learning engine's calculations, patience absolutely pays for most stocks!
For SLB stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
Next N DaysSLB Expected ReturnS&P 500 Expected Return1 day0%0.5%5 days0.1%1.1%10 days0%0.9%21 days1.4%3.1%63 days5.1%5.2%126 days2%7.4%252 days-1%15.6%
You can try the engine to see what this table looks like for Schlumberger after a larger loss over the last week, month, or quarter.
Question 3: What about the expected return after a rise if you wait for a while?
The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks - although SLB stock appears to be an exception to this general observation.
SLB's returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:
Next N DaysSLB Expected ReturnS&P 500 Expected Return1 day0%-0.3%5 days0.4%-0.3%10 days1.8%0.1%21 days2.5%0.5%63 days2%3.0%126 days1.1%6.6%252 days-0.9%11.7%
It's pretty powerful to test the trend for yourself for Schlumberger stock by changing the inputs in the charts above.