Can Bed Bath & Beyond Rebound After A 3% Drop In A Week?

In South Edmonton Common, a general view of a ‘Bed Bath & Beyond’ logo. In Edmonton, Alberta, there is a retail power… [+] center. The flagship shopping complex covers 320 acres and has over 2.3 million square feet of dining, shopping, and entertainment area, making it one of North America’s largest open-air retail developments. In Edmonton, Alberta, Canada, on Tuesday, July 12th, 2016. (Photo courtesy of Getty Images/Artur Widak/NurPhoto)
NurPhoto courtesy of Getty Images
The stock of Bed Bath & Beyond (NASDAQ: BBBY), a home products store, has dropped about 3% in the last week (five trading days) to roughly $29 now. The specialty retailer’s entire sales base is shrinking, and its restructuring plan (which includes the unloading of the Christmas Tree Shops and World Market Stores segments) is putting pressure on earnings. It also includes an expensive push toward omnichannel shopping. While BBBY’s revenues climbed for the fourth quarter in a row at existing locations, indicating that the business’s recovery plan is on track, the company still has a long way to go before it can claim to be on a sustainable development path. But, will BBBY’s stock continue to rise in the future weeks, or will it begin to fall? After a 3.1 percent drop in a week, BBBY stock returns average around 2.2 percent in the next one-month (twenty-one trading days) period, according to the Trefis Machine Learning Engine, which analyzes trends in a company’s historical stock price. But how do these figures vary if you want to hold BBBY stock for a shorter or longer period of time? On the Trefis Machine Learning Engine, you may test the response and many other combinations to see if BBBY stock would rise following a decline. You can evaluate the likelihood of recovery across time intervals of a quarter, month, or even a single day!
TRY THE MACHINE LEARNING ENGINE FOR YOURSELF:
IF BBBY stock moves -5 percent over five trading days, THEN BBBY stock moves an average of 2.7 percent over the next twenty-one trading days, with a 49 percent likelihood of a positive return during this period.

Trefis Average Return
Making Sense of BBBY Stock Movements: Some Fun Scenarios, FAQs, and Making Sense of BBBY Stock Movements:
Question 1: Is BBBY stock’s average return higher following a drop?
ADDITIONAL INFORMATION FOR YOU
Answer: Consider the following two scenarios:
Case 1: The stock of BBBY falls by 5% or more in a week.
Case 2: The stock of BBBY grows by at least 5% in a week.
Is the average return on BBBY stock after Case 1 or Case 2 higher in the following month?
BBBY stock performs better following Case 2, with an average return of 2.7 percent over the next month (twenty-one trading days) vs 3.6 percent for Case 1 (where the stock had just seen a 5 percent loss during the previous week).
In comparison, the S&P 500 has an average return of 3.1 percent in Case 1 and barely 0.5 percent in Case 2 over the next twenty-one trading days, according to our dashboard, which shows the average return for the S&P 500 after a fall or rise.
Use the Trefis machine learning engine to analyze how BBBY stock is likely to respond following any certain gain or loss over a period of time.
Question 2: Does it pay to be patient?
Answer: If you buy and retain BBBY stock, you may anticipate near-term swings to fade away over time, and a long-term favorable trend to favor you – at least if the firm is otherwise sound.
Overall, facts and Trefis’ machine learning engine estimates show that patience pays off in most stocks!
The following table shows the returns for BBBY stock over the next N days after a -5 percent shift over the previous five trading days, as well as the returns for the S&P500:

Trefis Average Return
You may use the engine to see how this table for BBBY looks after a higher loss in the previous week, month, or quarter.
Question 3: If you wait a bit following a climb, what is the average return?
Answer: As mentioned in the preceding question, the average return after a rise is lower than after a decrease. However, if a company has increased in the recent few days, you should avoid short-term bets in most cases – albeit BBBY stock appears to be an exception to this rule.
The table below shows BBBY’s returns over the next N days after a 5% shift over the previous five trading days, as well as the S&P500’s returns:

Trefis Average Return
By altering the variables in the charts above, you can test the trend for BBBY stock for yourself.
Retail revenues are being eroded by e-commerce, yet this could be an investment opportunity. A wide range of companies that stand to benefit from the huge change may be found in our E-commerce Stocks topic.
Here you may find all of Trefis’ Featured Analyses and Trefis Data./nRead More