The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue per share and Ebitda per share have been growing 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 be highly successful with stocks that have a high GuruFocus business predictability rating, in my opinion. Value investors could be interested in the following three companies, as they have high business predictability ratings from GuruFocus.
SAP SE
The first company that matches the criteria is SAP SE (SAP, Financial), a Walldorf, Germany-based enterprise application software company serving various businesses worldwide.
SAP SE's business has a 4.5-star rating for its predictability. The company saw its revenue per share grow by 8.30% and its Ebitda per share grow by 8.10% on average every year over the past 10 years.
The share price ($144.81 at close on Monday) represents a 148.22% increase compared to 10 years ago. The stock has a market capitalization of $170.81 billion.
GuruFocus assigned a financial strength rating of 6 out of 10 and a profitability rating of 9 out of 10 to the company.
The price-earnings ratio is 27.05 versus the industry median of 32.51, the enterprise-value-to-Ebitda ratio is 15.21 versus the industry median of 19.03 and the price-sales ratio is 5.34 versus the industry median of 3.72.
As of July, Wall Street sell-side analysts recommend a median rating of overweight for the stock with an average target price of $160.90 per share.
Deere & Co
The second company that meets the criteria is Deere & Co (DE, Financial), a Moline, Illinois-based global manufacturer and supplier of farm and heavy construction machinery.
Deere & Co's business has a 3.5-star business predictability rank. The company saw its revenue per share grow by 5% and its Ebitda per share grow by 5% on average every year over the past 10 years.
The share price ($334.95 at close on Monday) represents a more than 316% increase from 10 years ago. The stock has a market capitalization of $104.49 billion.
GuruFocus assigned a financial strength rating of 3 out of 10 and a profitability rating of 8 out of 10 to the company.
The price-earnings ratio is 23.08 versus the industry median of 19.1, the enterprise-value-to-Ebitda ratio is 17.32 versus the industry median of 12.07 and the price-sales ratio is 2.68 versus the industry median of 1.
As of July, Wall Street sell-side analysts recommend an overweight recommendation rating for this stock and have established an average target price of about $413.78 per share.
Anthem Inc
The third company that meets the criteria is Anthem Inc (ANTM, Financial), an Indianapolis, Indiana-based healthcare plans company.
Anthem Inc's business has a 4-star business predictability rank. The company saw its revenue per share grow by 11.9% and its Ebitda per share grow by 9.20% on average every year over the past 10 years.
The current share price ($384.44 as of Monday) has increased by almost 422% over the past 10 years, determining a market capitalization of $94.13 billion.
GuruFocus assigned a financial strength rating of 5 out of 10 and a profitability rating of 7 out of 10 to the company.
The price-earnings ratio is 20.59 versus the industry median of 17.66, the enterprise-value-to-Ebitda ratio is 13.07 versus the industry median of 10.33 and the price-sales ratio is 0.8 versus the industry median of 2.17.
As of July, Wall Street sell-side analysts recommend a median rating of overweight for the stock with an average target price of $426.23 per share.
Disclosure: I have no position in any security mentioned.
