Vulcan Materials Company stock (NYSE: VMC) increased 15% in the last one month and currently trades near $150 per share. But will the construction material giant’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 20 years, returns for VMC stock average -1.3% in the next one-month (21 trading days) period after experiencing a 15% rise over the previous one-month (21 trading days) period. Notably, though, the stock is likely to underperform the S&P500 over the next month, with an expected return which would be almost 1.4% lower compared to the S&P500.
But how would these numbers change if you are interested in holding VMC 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 VMC 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 1 day!
MACHINE LEARNING ENGINE – try it yourself:
IF VMC stock moved by -5% over 5 trading days, THEN over the next 21 trading days, VMC stock moves an average of 1.6 percent, which implies an excess return of 0.7 percent compared to the S&P500.
More importantly, there is 53% probability of a positive return over the next 21 trading days and 48% probability of a positive excess return after a -5% change over 5 trading days.
Some Fun Scenarios, FAQs & Making Sense of VMC Stock Movements:
Question 1: Is the average return for Vulcan Materials stock higher after a drop?
Consider two situations,
Case 1: Vulcan Materials stock drops by -5% or more in a week
Case 2: Vulcan Materials stock rises by 5% or more in a week
Is the average return for Vulcan Materials stock higher over the subsequent month after Case 1 or Case 2?
VMC stock fares better after Case 1, with an average return of 2.1% 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 0% 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 Vulcan Materials stock is likely to behave after any specific gain or loss over a period.
Question 2: Does patience pay?
If you buy and hold Vulcan Materials 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 VMC 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?
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.
VMC’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 Vulcan Materials stock by changing the inputs in the charts above.
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