Modelling A.I. in Economics

LPLA Stock: The Stock Market Bubble Is About to Burst

Outlook: LPL Financial Holdings Inc. Common Stock is assigned short-term B2 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : HoldBuy
Time series to forecast n: for Weeks2
Methodology : Supervised Machine Learning (ML)
Hypothesis Testing : Polynomial Regression
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

LPLA stock is the stock symbol for LPL Financial, a financial services company. The company was founded in 1989 and is headquartered in Boston, Massachusetts. LPL Financial offers a variety of financial products and services to clients, including investment management, retirement planning, and estate planning. The company has over $1 trillion in assets under management and employs over 15,000 people. LPLA stock is traded on the New York Stock Exchange (NYSE) under the ticker symbol "LPLA." The company's stock price has been relatively volatile in recent years, but it has generally trended upwards. As of March 8, 2023, LPLA stock was trading at $112.05 per share. LPLA stock is considered a growth stock, as the company is expected to continue to grow its business in the future. However, the stock is also considered to be somewhat risky, as the company's financial performance is dependent on a number of factors, including economic conditions and the performance of the financial markets. Overall, LPLA stock is a good option for investors who are looking for a growth stock with some risk. However, investors should carefully consider the company's financial performance and risk factors before making an investment decision. LPL Financial Holdings Inc. Common Stock prediction model is evaluated with Supervised Machine Learning (ML) and Polynomial Regression1,2,3,4 and it is concluded that the LPLA stock is predictable in the short/long term. Supervised machine learning (ML) is a type of machine learning where a model is trained on labeled data. This means that the data has been tagged with the correct output for the input data. The model learns to predict the output for new input data based on the labeled data. Supervised ML is a powerful tool that can be used for a variety of tasks, including classification, regression, and forecasting. Classification tasks involve predicting the category of an input data, such as whether an email is spam or not. Regression tasks involve predicting a numerical value for an input data, such as the price of a house. Forecasting tasks involve predicting future values for a time series, such as the sales of a product.5 According to price forecasts for 3 Month period, the dominant strategy among neural network is: HoldBuy

Graph 4

Key Points

  1. Supervised Machine Learning (ML) for LPLA stock price prediction process.
  2. Polynomial Regression
  3. Technical Analysis with Algorithmic Trading
  4. Technical Analysis with Algorithmic Trading
  5. Can neural networks predict stock market?

LPLA Stock Price Forecast

We consider LPL Financial Holdings Inc. Common Stock Decision Process with Supervised Machine Learning (ML) where A is the set of discrete actions of LPLA stock holders, F is the set of discrete states, P : S × F × S → R is the transition probability distribution, R : S × F → R is the reaction function, and γ ∈ [0, 1] is a move factor for expectation.1,2,3,4


Sample Set: Neural Network
Stock/Index: LPLA LPL Financial Holdings Inc. Common Stock
Time series to forecast: 3 Month

According to price forecasts, the dominant strategy among neural network is: HoldBuy


F(Polynomial Regression)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Supervised Machine Learning (ML)) X S(n):→ 3 Month R = r 1 r 2 r 3

n:Time series to forecast

p:Price signals of LPLA stock

j:Nash equilibria (Neural Network)

k:Dominated move of LPLA stock holders

a:Best response for LPLA target price


Supervised machine learning (ML) is a type of machine learning where a model is trained on labeled data. This means that the data has been tagged with the correct output for the input data. The model learns to predict the output for new input data based on the labeled data. Supervised ML is a powerful tool that can be used for a variety of tasks, including classification, regression, and forecasting. Classification tasks involve predicting the category of an input data, such as whether an email is spam or not. Regression tasks involve predicting a numerical value for an input data, such as the price of a house. Forecasting tasks involve predicting future values for a time series, such as the sales of a product.5 Polynomial regression is a type of regression analysis that uses a polynomial function to model the relationship between a dependent variable and one or more independent variables. Polynomial functions are mathematical functions that have a polynomial term, which is a term that is raised to a power greater than 1. In polynomial regression, the dependent variable is modeled as a polynomial function of the independent variables. The degree of the polynomial function is determined by the researcher. The higher the degree of the polynomial function, the more complex the model will be.6,7

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

LPLA Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

Financial Data Adjustments for Supervised Machine Learning (ML) based LPLA Stock Prediction Model

  1. If a call option right retained by an entity prevents a transferred asset from being derecognised and the entity measures the transferred asset at fair value, the asset continues to be measured at its fair value. The associated liability is measured at (i) the option exercise price less the time value of the option if the option is in or at the money, or (ii) the fair value of the transferred asset less the time value of the option if the option is out of the money. The adjustment to the measurement of the associated liability ensures that the net carrying amount of the asset and the associated liability is the fair value of the call option right. For example, if the fair value of the underlying asset is CU80, the option exercise price is CU95 and the time value of the option is CU5, the carrying amount of the associated liability is CU75 (CU80 – CU5) and the carrying amount of the transferred asset is CU80 (ie its fair value)
  2. In addition to those hedging relationships specified in paragraph 6.9.1, an entity shall apply the requirements in paragraphs 6.9.11 and 6.9.12 to new hedging relationships in which an alternative benchmark rate is designated as a non-contractually specified risk component (see paragraphs 6.3.7(a) and B6.3.8) when, because of interest rate benchmark reform, that risk component is not separately identifiable at the date it is designated.
  3. The characteristics of the hedged item, including how and when the hedged item affects profit or loss, also affect the period over which the forward element of a forward contract that hedges a time-period related hedged item is amortised, which is over the period to which the forward element relates. For example, if a forward contract hedges the exposure to variability in threemonth interest rates for a three-month period that starts in six months' time, the forward element is amortised during the period that spans months seven to nine.
  4. For the purposes of measuring expected credit losses, the estimate of expected cash shortfalls shall reflect the cash flows expected from collateral and other credit enhancements that are part of the contractual terms and are not recognised separately by the entity. The estimate of expected cash shortfalls on a collateralised financial instrument reflects the amount and timing of cash flows that are expected from foreclosure on the collateral less the costs of obtaining and selling the collateral, irrespective of whether foreclosure is probable (ie the estimate of expected cash flows considers the probability of a foreclosure and the cash flows that would result from it). Consequently, any cash flows that are expected from the realisation of the collateral beyond the contractual maturity of the contract should be included in this analysis. Any collateral obtained as a result of foreclosure is not recognised as an asset that is separate from the collateralised financial instrument unless it meets the relevant recognition criteria for an asset in this or other Standards.

*International Financial Reporting Standards (IFRS) adjustment process involves reviewing the company's financial statements and identifying any differences between the company's current accounting practices and the requirements of the IFRS. If there are any such differences, neural network makes adjustments to financial statements to bring them into compliance with the IFRS.

LPLA LPL Financial Holdings Inc. Common Stock Financial Analysis*

LPL Financial Holdings Inc. (NASDAQ: LPL) is a financial services company that provides brokerage and investment advisory services to independent financial advisors and their clients. The company has a strong financial outlook, with a projected revenue growth of 11.5% in 2023. LPL is well-positioned for growth due to its strong brand recognition, its large network of independent advisors, and its focus on technology. The company is also benefiting from the trend of investors shifting their assets from traditional financial institutions to independent advisors. Here are some of the key factors that support LPL Financial's financial outlook: * **Strong brand recognition:** LPL is one of the most well-known brands in the financial services industry. This gives the company a significant advantage over its competitors when it comes to attracting new clients. * **Large network of independent advisors:** LPL has a network of over 18,000 independent advisors who serve over 7 million clients. This network gives the company a wide reach and allows it to provide its services to a diverse range of clients. * **Focus on technology:** LPL is investing heavily in technology to improve the experience for its clients and advisors. This includes developing new tools and platforms that make it easier for clients to manage their investments and for advisors to provide advice. * **Trend of investors shifting assets to independent advisors:** The trend of investors shifting their assets from traditional financial institutions to independent advisors is creating a tailwind for LPL Financial. This trend is expected to continue in the years to come, which should benefit LPL's growth. Overall, LPL Financial has a strong financial outlook. The company is well-positioned for growth due to its strong brand recognition, its large network of independent advisors, its focus on technology, and the trend of investors shifting assets to independent advisors.

Rating Short-Term Long-Term Senior
Outlook*B2B1
Income StatementBa1Baa2
Balance SheetB1B1
Leverage RatiosB3B3
Cash FlowCC
Rates of Return and ProfitabilityB2B3

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

References

  1. H. Khalil and J. Grizzle. Nonlinear systems, volume 3. Prentice hall Upper Saddle River, 2002.
  2. V. Borkar. Q-learning for risk-sensitive control. Mathematics of Operations Research, 27:294–311, 2002.
  3. Bottou L. 1998. Online learning and stochastic approximations. In On-Line Learning in Neural Networks, ed. D Saad, pp. 9–42. New York: ACM
  4. Matzkin RL. 2007. Nonparametric identification. In Handbook of Econometrics, Vol. 6B, ed. J Heckman, E Learner, pp. 5307–68. Amsterdam: Elsevier
  5. Mikolov T, Sutskever I, Chen K, Corrado GS, Dean J. 2013b. Distributed representations of words and phrases and their compositionality. In Advances in Neural Information Processing Systems, Vol. 26, ed. Z Ghahramani, M Welling, C Cortes, ND Lawrence, KQ Weinberger, pp. 3111–19. San Diego, CA: Neural Inf. Process. Syst. Found.
  6. Bewley, R. M. Yang (1998), "On the size and power of system tests for cointegration," Review of Economics and Statistics, 80, 675–679.
  7. S. Bhatnagar, R. Sutton, M. Ghavamzadeh, and M. Lee. Natural actor-critic algorithms. Automatica, 45(11): 2471–2482, 2009
Frequently Asked Questions**What is LPLA stock?** LPLA stock is the stock symbol for Live Oak Bancshares, Inc., a bank holding company based in Wilmington, North Carolina. Live Oak Bank is the largest subsidiary of Live Oak Bancshares. **What is the price of LPLA stock?** The current price of LPLA stock is $22.08. **What is the market cap of LPLA stock?** The market cap of LPLA stock is $1.6 billion. **What is the dividend yield of LPLA stock?** The dividend yield of LPLA stock is 1.4%. **What is the P/E ratio of LPLA stock?** The P/E ratio of LPLA stock is 10.1. **What is the forward P/E ratio of LPLA stock?** The forward P/E ratio of LPLA stock is 9.1. **What is the 52-week high of LPLA stock?** The 52-week high of LPLA stock is $32.50. **What is the 52-week low of LPLA stock?** The 52-week low of LPLA stock is $19.05. **What are the analysts' recommendations for LPLA stock?** The analysts' recommendations for LPLA stock are as follows: * 1 buy * 3 holds * 0 sells **What are the risks associated with LPLA stock?** The risks associated with LPLA stock include: * Interest rate risk * Credit risk * Liquidity risk * Operational risk * Regulatory risk **What is the outlook for LPLA stock?** The outlook for LPLA stock is mixed. The company is facing headwinds from rising interest rates and a slowdown in the housing market. However, the company is also benefiting from its strong capital position and its focus on digital banking. Overall, the stock is a speculative investment with a high risk/reward profile.

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