Hill-Rom Stock Is Up 10% In A Month, Can It Move Higher?

October 20th, 2020 by Trefis Team
HRC: Hill-Rom logo
HRC
Hill-Rom

Hill-Rom Holdings stock (NYSE: HRC) gained around 10% over the month to levels of around $90 currently. But will the company’s stock see higher prices over the coming weeks, or is a decline in the stock imminent?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price, returns for Hill-Rom stock average around 1.6% in the next one-month (21 trading days) period after experiencing 10% gains over the previous month (21 trading days). Notably, though, the stock is very likely to outperform the S&P500 over the next month (21 trading days), with an expected excess return of 1.2%.

But how would these numbers change if you are interested in holding HRC stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Hill-Rom stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

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MACHINE LEARNING ENGINE – try it yourself:

IF HRC stock moved by -5% over 5 trading days, THEN over the next 21 trading days, HRC stock moves an average of 2.3%, which implies an excess return of 0.3% compared to the S&P500.

More importantly, there is a 60% probability of a positive return over the next 21 trading days and 56% probability of a positive excess return after a -5% change over 5 trading days.

Some Fun Scenarios, FAQs & Making Sense of Hill-Rom Stock Movements:

Question 1: Is the average return for Hill-Rom stock higher after a drop?

Answer: Consider two situations,

Case 1: Hill stock drops by -5% or more in a week

Case 2: Hill stock rises by 5% or more in a week

Is the average return for Hill-Rom stock higher over the subsequent month after Case 1 or Case 2?

HRC stock fares better after Case 1, with an average return of 5.2% 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 average return of 1.8% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Hill-Rom stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Hill-Rom 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 the Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For HRC 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:

You can try the engine to see what this table looks like for Hill-Rom after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall 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 HRC stock appears to be an exception to this general observation.

HRC’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:

It’s pretty powerful to test the trend for yourself for Hill-Rom stock by changing the inputs in the charts above.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.

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