Low Transportation Volumes To Weigh On Plains All American Pipeline Stock
After the Saudi-led production curtailments provided cushion to falling benchmark prices, upstream companies in the U.S. stabilized production volumes assisting the finances of midstream companies including Plains All American Pipeline (NASDAQ: PAA). Per recent filings, PAA is targeting lower transportation volume and storage capacity utilization during the latter half of the year – a headwind for the company’s fee-based services. Thus, the stock is likely to trade sideways in the near-term.
According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, PAA stock will likely decline –0.7% over the next one month (twenty-one trading days) considering the –0.8% drop in the past week (five trading days).
But how would these numbers change if you are interested in holding Plains All American Pipeline 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 Plains All American Pipeline 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 one day!
MACHINE LEARNING ENGINE – try it yourself:
IF PAA stock moved by -5% over five trading days, THEN over the next twenty-one trading days, PAA stock moves an average of 0.1 percent, with a 54.1% probability of a positive return over this period.
MORE FOR YOU
Also, given a -5% movement for the stock over five trading days, it has historically witnessed an excess return of -1.1% compared to the S&P500 over the next 21 trading days, with a 46.2% percent probability of a positive excess return
Some Fun Scenarios, FAQs & Making Sense of Plains All American Pipeline Stock Movements:
Question 1: Is the average return for Plains All American Pipeline stock higher after a drop?
Answer: Consider two situations,
Case 1: Plains All American Pipeline stock drops by -5% or more in a week
Case 2: Plains All American Pipeline stock rises by 5% or more in a week
Is the average return for Plains All American Pipeline stock higher over the subsequent month after Case 1 or Case 2?
PAA stock fares better after Case 2, with an average return of 0.1% 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 1.8% 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 Plains All American Pipeline 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 Plains All American Pipeline 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 PAA 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 PAA 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?
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 PAA stock appears to be an exception to this general observation.
PAA’s 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:
It’s pretty powerful to test the trend for yourself for Plains All American Pipeline stock by changing the inputs in the charts above.
Do shares of other midstream operators offer better odds ? Plains All American Pipeline Stock Comparison With Peers summarizes how PAA compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.
See all Trefis Featured Analyses and Download Trefis Data here