The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue and Ebitda, both on a per share basis, have been increasing steadily and who have produced a strong long-term performance of their stock prices.
Thus, an investment strategy based on a "buy and hold" approach could have great success if applied to stocks with a high GuruFocus business predictability rating, in my opinion. Value investors may want to consider the following three companies, as they have high business predictability ratings from GuruFocus.
Nexstar Media Group Inc
The first company that meets the criteria is Nexstar Media Group Inc (NXST, Financial), an Irving, Texas-based television broadcasting and digital media company.
Nexstar Media Group Inc's business has a 5-star rating for its predictability. The company saw the revenue per share grow by 26.10% and the Ebitda per share grow by 26% on average every year over the past 10 years.
The share price ($151.38 at close on Thursday) represents a more than 22-fold increase from 10 years ago. The stock has a market capitalization of $6.60 billion.
GuruFocus assigned a financial strength rating of 3 out of 10 and a profitability rating of 9 out of 10 to the company.
The price-earnings ratio is 8.7 versus the industry median of 22.43, the enterprise-value-to-Ebitda ratio is 7.05 versus the industry median of 11.84 and the price-sales ratio is 1.58 versus the industry median of 1.74.
As of April, Wall Street sell-side analysts recommend a median rating of buy for the stock.
NV5 Global Inc
The second company that holds the criteria is NV5 Global Inc (NVEE, Financial), a Hollywood, Florida-based provider of engineering and construction services to several industries in the U.S. and internationally.
NV5 Global Inc's business has a 4-star business predictability rank. The company saw the revenue per share grow by 20% and the Ebitda per share grow by 31.80% on average every year over the past 10 years.
The current share price ($94.40 as of Thursday) has risen by more than 12-fold over the past 10 years for a market capitalization of $1.41 billion.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 8 out of 10 to the company.
The price-earnings ratio is 57.23 versus the industry median of 16.04, the enterprise-value-to-Ebitda ratio is 18.56 versus the industry median of 9.58 and the price-sales ratio is 1.81 versus the industry median of 0.76.
As of April, Wall Street sell-side analysts recommend a median rating of overweight for the stock.
Netflix Inc
The third company that matches the criteria is Netflix Inc (NFLX, Financial), a Los Gatos, California-based provider of streaming entertainment services.
Netflix Inc's business has a 5-star predictability rating. The company saw the revenue per share grow by 25% and the Ebitda per share grow by 32.40% on average every year over the past 10 years.
The current share price ($544.51 as of Thursday) has risen by more than 16-fold over the past 10 years for a market capitalization of $241 billion.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 9 out of 10 to the company.
The price-earnings ratio is 89.34 versus the industry median of 22.43, the enterprise-value-to-Ebitda ratio is 16.05 versus the industry median of 11.84 and the price-sales ratio is 9.89 versus the industry median of 1.74.
As of April, Wall Street sell-side analysts recommend a median rating of overweight for the stock.
Disclosure: I have no position in any security mentioned.
Read more here:
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- 3 Stocks Trading Below the Peter Lynch Earnings Line
- A Trio of Stocks Trading Below the Earnings Power Value
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