AGCO stock should rebound in a week after falling 7% – Trefis


The share price of AGCO (NASDAQ: AGCO), a manufacturer of agricultural machinery has suffered a minus of 7% in the last five trading days. While there was no company-specific announcement, agricultural and construction equipment-focused industrials sold off last week, with Caterpillar and Deere also down over 5% over the same period.

After AGCO stock fell 7% in just five days, will it continue its downtrend in the coming weeks, or is the stock imminent? Looking at the historical performance of AGCO stock, it appears that the stock will rebound in the near future. Using the most recent trend (7% decline in one week) and ten years of historical stock data, the Trefis AI engine determines that AGCO stock is likely to rise over 5% in the next month (twenty-one trading days). Also, the age of farm equipment in the US is now above average, and this is likely to result in strong demand as farmers seek to replace existing equipment, which is a good sign for AGCO stock.

According to the Trefis Machine Learning Engine, which uses historical stock data to identify trends in a company’s stock price, the average returns on AGCO stocks are around 4.9% in the next period of one month (twenty-one trading days) after one 5% fall in a week (five trading days) and mark a 2.3% return on investment compared to the S & P500. There is also a 67% probability of a positive return in the next 21 trading days and a 52% probability of a positive excess return.

But how would those numbers change if you were interested in holding AGCO stock for a shorter or longer period of time? You can test the answer and many other combinations on the Trefis Machine learning engine to test the chances of AGCO shares rising after falling. You can test the chance of recovery over different time intervals of a quarter, a month or even just a day!

Some fun scenarios, frequently asked questions, and the development of AGCO stock movements:

Question 1: Is the average return on AGCO stock higher after a decline?

Reply: Consider two situations

Case 1: AGCO stock falls -5% or more in a week

Case 2: AGCO stock rises 5% or more in a week

Is the average return on AGCO shares higher in the month following Case 1 or Case 2?

AGCO share performs better after case 1, with an average return of 4.7% over the next month (21 trading days) in case 1 (where the stock just suffered a 5% loss in the previous week), versus an average return of 1.1% in case 2.

Try the Trefis machine learning engine above to see for yourself how AGCO stocks are likely to perform after a given profit or loss over a period of time.

Question 2: Is patience worth it?

Reply: When you buy and hold AGCO stock, it is expected that over time, the short-term fluctuations will offset and the long-term positive trend will benefit you – at least if the company is otherwise strong.

Overall, according to the data and calculations of the Trefis Machine Learning Engine, patience pays off for most stocks!

You can try the engine to see what this table looks like for AGCO after a major loss in the past week, month, or quarter.

Question 3: What about the average return after an increase if you wait a while?

Reply: The average return after an increase is understandably lower than after a decrease, as described in the previous question. Interestingly, however, if a stock has risen in the past few days, avoid short-term bets on most stocks.

It’s pretty powerful to test the trend for AGCO stocks yourself by changing the inputs on the charts above.

While AGCO stock can potentially see higher levels, 2020 has created many price discontinuities that can offer attractive trading opportunities. For example, you might be surprised how unintuitive stock valuation is Techne vs. Generac Holdings.

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