Applied Materials Stock: 9 Straight Red Days, Down 25%

Shares of Applied Materials (AMAT) have closed lower in each of the last 9 sessions, a cumulative decline of 24.5%. That erased about $105.6 billion from the company's market value, which now stands at about $325.0 billion. The stock closed at $409.29 on Friday, October 16, 43.3% below its 52-week high of $722.23 and 86.6% above its low of $219.35.

AMAT Versus The S&P 500

Returns for AMAT and the S&P 500 over the streak and the periods around it, all ending Friday, October 16 and including dividends:

How The Streak Compares With The Market

Over the same 9 trading days, the S&P 500 returned -1.4% including dividends, so the slide is mostly Applied Materials' own story rather than the market's. 3 other S&P 500 stocks are currently on losing streaks of 9 days or longer. Over the past three months the stock is down 22.1%, a window that includes the streak; over the other 54 sessions of that window it was up 3.3%.

Is The Business As Weak As The Stock?

On the fundamentals, revenue grew 7.8% over the last twelve months, against a median of 17.9% for S&P 500 Information Technology stocks; its operating margin is 31.1%, versus a median of 21.6%; and the stock trades at 35.1 times trailing earnings against a median of 34.0. The read is mixed: margins above the median on one side, revenue growth below the median on the other.

A slide like this raises an obvious follow-up: which marked-down stocks are actually worth buying? Our Buy the Dip screen runs that test every day, flagging beaten-down names whose fundamentals still hold up.

Prefer the theme to the single name? A semiconductor ETF like SMH holds the whole group, not just this stock. It is still a concentrated bet on one theme, which is the gap the portfolio below is built to close.

Weakness In One Name Should Be Noise, Not News

For a diversified holder, a streak like this is a data point. For a concentrated one, it is a hole in the plan. The difference is never the stock; it is the portfolio built around it.

Building that portfolio is what the Trefis High Quality (HQ) Portfolio does: roughly 30 businesses with the cash generation and balance-sheet strength to absorb a bad month, selected and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Make the next streak, in either direction, someone else's drama.