It is a comparative analysis of the prices of securities resulting from investor expectations already produced by careful examinations of current or future economic, competitive and managerial actions and influences. The emphasis is on stock prices, not on the underlying causal thoroughness well assessed by analysts informed and able to process this level of inputs.
We are looking to see how actual market price results followed before ITT Inc. (ITT) assessments of the balance between price risk and price reward where this balance in daily comparisons over the past 5 years has been as seen now. The issues of credibility, frequency, balance, and size of forecasts in each direction may all matter in comparisons with alternative investment candidates with similar competitive circumstances and frequent investor referrals.
ITT Inc. manufactures and sells critical engineered components and customized technology solutions for the energy, transportation and industrial markets around the world. The company operates through Motion Technologies, Industrial Process and Connect & Control Technologies. The Motion Technologies segment manufactures primarily for the transportation industry, including passenger cars, light and heavy commercial and military vehicles, buses and trains. The Industrial Processes segment designs and manufactures for customers in industries such as the chemical, oil and gas, mining and other industrial process markets. The Connect & Control Technologies segment designs and manufactures technical connectors and specialized control components for aerospace and defense, industrial, transportation, medical, oil and gas. ITT Inc. was incorporated in 1920 and is headquartered in White Plains, New York.
Risk-return balances of investment candidates
(used with permission)
The trade-offs here lie between the short-term upward price gains (green horizontal scale) that deserve to be protected by market makers with short positions in each of the stocks, and the prior real price declines experienced during the holding of these shares (red vertical scale). Both scales are percentage change from zero to 25%.
The intersection of these coordinates by the numbered positions is identified by the stock market symbols in the blue field to the right.
The dotted diagonal line marks the equal upward price change forecast points derived from Market-Maker [MM] hedging actions and actual worst-case price declines from positions that could have been taken as a result of past MM forecasts like today’s.
Our main interest is in ITT at the location . A risk-reward trade-off “market index” standard is offered by SPDR S&P 500 Index ETF (SPY) also at .
These predictions are implied by the self-protective behaviors of MMs who typically need to put company capital at temporary risk to balance the interests of buyers and sellers by helping managers of large capital portfolios to make market adjustments. volume in multi-billion dollar portfolios. Their protective actions daily define the extent of likely price changes expected for thousands of stocks and ETFs.
This card is a good place to start, but it can only cover some of the investment characteristics that should often influence an investor’s choice of where to invest their capital. The table in Figure 2 covers the above considerations and several others.
Compare alternative investments
The column price range forecast limits [B] and [C] be defined by the MM’s hedging actions to protect the company’s capital to be exposed to the risk of price changes due to volume trade orders placed by large $ “institutional” clients.[E] measures the potential upside risks for short MM positions created to execute those orders, and rewards the potentials for long positions so created. Previous forecasts like this provide a history of relevant downside risks to buyers. The most serious ones actually encountered are in [F], during periods of detention in order to achieve [E] wins. This is where buyers are most likely to accept losses. [H] indicates what proportion of the [L] a sample of similar past predictions made gains by causing the price to hit its [B] target or be above his [D] entry cost at the end of a maximum-patience holding period of 3 months. [I] gives the net gains-losses of these [L] experiences and [N] suggests how much [E] can be compared to [I].
Other reward-risk trade-offs involve the use of [H] odds for gains with loss odds 100 – H as weight for N-conditioning [E] and for [F], for a combined return score [Q]. The typical period of holding the position [J] to [Q] provides a symbol of merit [fom] ranking measure [R] useful in portfolio position preference. Figure 2 is ranked by row on R among candidate titles, with ITT ranked first.
In addition to candidate-specific stocks, these selection considerations are provided for the averages of nearly 3,500 stocks for which MM price range forecasts are available today, and 20 of the top-ranked (by of) of these forecasts, as well as the forecasts of the S&P 500 Index ETF (SPY) as a proxy for the equity market.
What makes ITT the most attractive in the group at this stage is its ability to produce price gains above current forecasts (+ 10.3%) demonstrated by + 13.1% on average 30 times over the years. Last 5 years compared to previous expected results with the same range Index balance between bullish and bearish outlook (RI of -8) to date. And to do so, on average in just 34 trading days, within seven calendar weeks. Done over 7 times a year, this rate is a CAGR of almost + 150%.
The 30 forecasts held over 34 trading days would be 1020 days, or just over 4 years of capital investment commitment at 252 trading days per year. At this constant rate of return, the four years would turn $ 1,000 of capital into over $ 15,600. Which makes for a pretty powerful story.
Recent trends in MM price band forecasts for ITT
This image is not a “technical table” of past prices for ITT. Instead, these are the last 6 months of price range forecast market actions to come in the next few months. The only information passed is the closing price of the stock on the day of each forecast.
This data divides the opposing price range forecast into an upward and downward outlook. Their trends over time provide additional insight into upcoming potentials and help keep perspective on what might come.
The small image at the bottom of Figure 3 is a frequency distribution the daily appearance of the Range Index over the last 5 years of daily forecasts. The range index [RI] indicates how much the decline in the forecast range occupies that percentage of the entire range each day, and its frequency suggests what may look “normal” for this stock, in the eyes of its valuers.
For ITT, the current level of RI is at an extremely low level, indicating that higher levels (and prices) can realistically be expected. If this were to start happening, its advance could eventually reach a point where ITT’s price would start to “swim upstream” as a more common future event.
Previous profitability of investment applicants
(used with permission)
This comparison map uses an orientation similar to that in Figure 1, where the most desirable locations are on the bottom right. Instead of the price direction, the questions here are more qualitative: “how big” and “what is the likelihood” are the price change expectations now?
Our main interest is the qualitative performance of ITT, in particular in relation to the choice of alternative investment candidates. Here ITT is at the location , the intersection of the horizontal and vertical scales of + 15% gain and + 90% insurance (chances of a “gain”).
As a market standard, SPY is at the location  with a gain of + 7% and an assurance of profitability of 87%. ITT tends to dominate all others in this comparison.
Of these explicitly compared alternative investments, ITT Inc. seems to be a logical buying preference for investors seeking short-term capital appreciation.
Additional Disclosure: Peter Way and generations of the Way family are providers of long-term forward-looking information, previously helping professional investors, and now individual investors, distinguish between opportunities for wealth creation in individual stocks and ETFs. We do not manage money for other people outside the family, but provide pro bono advice to a limited number of nonprofit organizations.
We firmly believe that investors must keep their skin in their game by actively initiating capital commitment choices. and time investments in their personal wallets. Thus, our information presents DIY investors what probably the best informed professional investors think. Their insights, revealed by their own self-protection hedging actions, point to what they think is most likely to happen to specific issue prices in the weeks and months to come. Evidence of how these past predictions worked is regularly provided on our SA blog under my name. Our website, blockdesk.com has more information.