What’s Behind Wheaton Precious Metals Stock’s Recent Rise?

by Trefis Team
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Wheaton Precious Metals
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Wheaton Precious Metals stock (NYSE: WPM) has increased by 10% in the last six months and currently trades at $45 per share. The recent uptick was mainly driven by some recovery in the prices of precious metals. After falling from over $2,000/ounce in late 2020 to less than $1,700/ounce in March 2021, global gold price has recovered over recent months and currently (at the end of July 2021) stands at over $1,800/ounce. Similarly, silver prices which had declined from over $29/ounce in late 2020 to $24/ounce in March 2021, have also recovered to well over $25/ounce as on 29th July, 2021. Palladium price has also seen some strength over the last month. The recent spike in Covid positive cases, spread of Delta variant, and lockdowns in some parts of the globe have led to a surge in the price of precious metals, as there are expectations that the global economic recovery might not be as sharp as projected earlier. Also, with interest rates likely to remain subdued for some more time, precious metals have become lucrative options for investors. But will WPM’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 ten years, returns for WPM stock average less than 3% in the next six-month (126 trading days) period after experiencing a 10% rise over the previous six-month (126 trading days) period. There is a 48% probability that the stock will give a positive return over the next six months. But how would these numbers change if you are interested in holding WPM stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test WPM stock chances of a rise after a fall and vice versa. 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 WPM stock moved by -5% over five trading days, THEN over the next 21 trading days, WPM stock moves an average of 2.7 percent, with a 54.5% probability of positive return over this period.

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

Question 1: Is the average return for Wheaton Precious Metals Corp stock higher after a drop?

Answer:

Consider two situations,

Case 1: Wheaton Precious Metals Corp stock drops by -5% or more in a week

Case 2: Wheaton Precious Metals Corp stock rises by 5% or more in a week

Is the average return for Wheaton Precious Metals Corp stock higher over the subsequent month after Case 1 or Case 2?

WPM stock fares better after Case 2, with an average return of 2.7% 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 2.8% 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 Wheaton Precious Metals Corp 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 Wheaton Precious Metals Corp 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 WPM 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:

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

WPM’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 Wheaton Precious Metals Corp 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 that’s beaten the market since 2016.

 

See all Trefis Price Estimates and Download Trefis Data here

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