News Corp Announces $1 Billion Stock Repurchase Program – Impact on Stock?

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News Corp stock (NASDAQ: NWSA) jumped almost 11% in just the last one week and now trades at $24 per share. NWSA stock saw such a sharp rise after the company announced a $1 billion stock repurchase program, which will begin after the company’s earnings call in November. This new program will replace its previous $500 million Class A repurchase program that was approved in 2013. Also, this comes on the heels of the company’s most profitable year since the launch of the new News Corp in 2013. With the company’s CEO striking a bullish tone for the business potential, and the announcement of a large buyback program, this has enthused investors, thus pushing the stock higher. But will NWSA’s stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last eight years, returns for NWSA stock are likely to average 8% in the next one-month (21 trading days) period after experiencing an 11% rise over the previous one-week (five trading days) period. Also, there is a 75% chance of the stock giving positive returns over the next one month. But how would these numbers change if you are interested in holding NWSA 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 NWSA stock price forecast after a rise or fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day! For additional details about NWSA historical returns and return comparison to peers, see News Corp (NWSA) Stock Return.

MACHINE LEARNING ENGINE – try it yourself:

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IF NWSA stock moved by -5% over five trading days, THEN over the next 21 trading days, NWSA stock remains flat, with a 46.4% probability of a positive return.

Some Fun Scenarios, FAQs & Making Sense of NWSA Stock Movements:

Question 1: Is the price forecast for News stock higher after a drop?

Answer:

Consider two situations,

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

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

Is the price forecast for News stock higher over the subsequent month after Case 1 or Case 2?

NWSA stock fares better after Case 2, with an expected return of 0% 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 3.2% for Case 2. This implies a price forecast of $24 in Case 1 and a figure of $25 in Case 2 using NWSA market price of $24.37 on 9/26/2021.

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 the forecast for News stock is likely to changes after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold News 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 NWSA stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the stock price forecast after a rise if you wait for a while?

Answer:

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 NWSA stock appears to be an exception to this general observation.

NWSA’s returns over the next N days after a 5% change over the last five 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 News stock by changing the inputs in the charts above.

 

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