Last Year, Schlumberger (NYSE: SLB) divested its North American production business to Liberty Oilfield due to low demand for drilling & completion services and continued weakness in benchmark prices. However, the U.S. and international crude oil inventories have been on a decline in recent months, triggering expectations of rising demand for oil field services. Thus, SLB stock gained 5.7% in the past week. According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, SLB stock will likely gain 2.8% over the next one month (twenty-one trading days) considering last week’s (five trading days) trajectory.
But how would these numbers change if you are interested in holding Schlumberger 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 Schlumberger stock expected return 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!
MACHINE LEARNING ENGINE – try it yourself:
IF SLB stock moved by -5% over five trading days, THEN over the next twenty-one trading days, SLB stock moves an average of 1.4%, with a 54.6% probability of a positive return over this period.
Also, given a -5% movement for the stock over five trading days, it has historically witnessed an excess return of -0.6% compared to the S&P500 over the next 21 trading days, with a 42.9% percent probability of a positive excess return.
Some Fun Scenarios, FAQs & Making Sense of Schlumberger Stock Movements:
Question 1: Is the average return for Schlumberger stock higher after a drop?
Answer: 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?
Answer: 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 five 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 Schlumberger 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 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 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 Schlumberger stock by changing the inputs in the charts above.