UKRAINE – 2021/05/05: In this Photo illustration a Littelfuse logo of an US electronic manufacturing … [+] company is seen on a smartphone and a pc screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
The stock price of Littelfuse Inc. reached its 52-week high of $290 in the last month, but has since dropped from that level. Further, the stock fell 4% in the past week, to levels of around $272 currently, likely due to some profit booking after the post-earnings rally. Littelfuse reported Q2 ’21 earnings at the end of July, with sales jumping from $307 million in Q2 ’20 to $523 million in Q2 ’21. Further, with a check on the rise of COGS and operating expenses, and a $35 million drop in restructuring and impairment charges, Littelfuse saw operating income come in at $96 million, a turnaround from the $12 million loss for the same period last year. This led to a rise in EPS from -$0.37 in Q2 ’20 to $3.34 in Q2 ’21. This stellar earnings growth led to the stock rallying from around $250 at July end to almost $290 by the end of August. With the S&P trending lower this past week, Littelfuse stock likely witnessed some booking of profits, driving the stock down to around $270 currently.
Now, after a 4% fall in a week, will Littelfuse stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price using ten years of historical data, returns for Littelfuse stock average 3.9% in the next one-month (twenty-one trading days) period after experiencing a 4% drop over the previous week (five trading days).
But how would these numbers change if you are interested in holding Littelfuse 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 Littelfuse stock chances of a rise after a fall. 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 Littelfuse stock moved by -5% over five trading days, THEN over the next twenty-one trading days Littelfuse stock moves an average of 3.8%, with a strong 70.4% probability of a positive return over this period.
Some Fun Scenarios, FAQs & Making Sense of Littelfuse Stock Movements:
Question 1: Is the average return for Littelfuse stock higher after a drop?
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Answer: Consider two situations,
Case 1: Littelfuse stock drops by 5% or more in a week
Case 2: Littelfuse stock rises by 5% or more in a week
Is the average return for Littelfuse stock higher over the subsequent month after Case 1 or Case 2?
Littelfuse stock fares better after Case 1, with an average return of 3.8% 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 2.3% 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 Littelfuse 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 Littelfuse 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 Littelfuse 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 Littelfuse 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 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.
It’s pretty powerful to test the trend for yourself for Littelfuse stock by changing the inputs in the charts above.
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