What is Ainos Predictability Rank?
1 (5)
Warren Buffett said many times that the companies he likes are:
1. Simple businesses that he understands
2. that have predictable and proven earnings and
3. with economic moat
4. those can be bought at a reasonable price.
It is hard to quantify "simple businesses that he (Buffett) understands", so we will focus on the other three characteristics instead. In GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank, we will show that the businesses that have predictable and proven earnings are usually also simple businesses that an average person could understand.
GuruFocus conducted a back test study of Warren Buffett's strategy of "buying good companies at fair prices" for the years from 1998-2008.
Ainos Predictability Rank Calculation
In our database there are 2403 stocks that have been traded from Jan. 2, 1998 to Aug. 31, 2008. We have the complete 10-year financial data and trading prices of these companies for this period. We rank the predictability of these companies based on the consistency of their revenue per share and EBITDA (earning before interest, tax, depreciation and amortization) per share over the past ten fiscal years, and study the correlation between the stock performances and the predictability of the business.
Our study may be subject to these biases and assumptions:
Dividend yields are not counted for investment returns
Effects of price changes due to spin-offs may not be fully adjusted
Study is subjected to survivorship bias due to de-listing, bankruptcy, LBO, M&A, etc.
The correlation between business predictability and investment returns of a company is showed below.
Correlation Between Business Predictability and Investment Returns
| Predictables | Non-Predictable | All stocks |
|---|
| Total Number of stocks | 570 | 1833 | 2403 |
| Total Lost Money | 61 | 830 | 891 |
| Total Lost More Than 50% | 18 | 412 | 430 |
| Total Lost More Than 90% | 4 | 86 | 90 |
| Average Gain | 260.6% | 100.0% | 138.1% |
| Median Gain | 150.0% | 13.0% | 39.0% |
| Maximum Gain | 2852.0% | 11483.0% | 11483.0% |
| Maximum Loss | -100.0% | -100.0% | -100.0% |
| Annualized Average Gain | 12.7% | 6.7% | 8.4% |
| Annualized Median Gain | 8.9% | 1.1% | 3.1% |
For the 570 predictable companies, we have seen strong correlation between the predictability of businesses and the stock performances over the past 10 years, regardless of the valuation of business at 1998. Accordingly, we have ranked the business predictability from 5-star to 1-star, as shown in this table.
| Predictability Rank | 5-Star | 4.5-Star | 4-Star | 3.5-Star | 3-Star | 2.5-Star | 2-Star | 1-Star (non-predictable) | Average among all |
|---|
| % Out of All 2403 Stocks |
3.3% |
2.9% |
3.7% |
3.3% |
3.3% |
3.7% |
3.3% |
76.3% |
100% |
| % that are in Loss (10y) |
3% |
10% |
8% |
9% |
11% |
18% |
16% |
45% |
37% |
| Average Gain (10y) |
364.6% |
330.9% |
278.0% |
235.1% |
243.5% |
227.8% |
154.8% |
100.0% |
138.1% |
| Median Gain (10y) |
238.5% |
193.5% |
171.0% |
159.0% |
132.5% |
113.5% |
87.0% |
13.0% |
39.0% |
| Maximum Gainer |
2228.0% |
2547.0% |
2452.0% |
2852.0% |
2432.0% |
1892.0% |
1807.0% |
11483.0% |
11483.0% |
| Maximum Loser |
-82.0% |
-53.0% |
-67.0% |
-100.0% |
-83.0% |
-100.0% |
-78.0% |
-100.0% |
-100.0% |
| Annualized Average Gain |
15.4% |
14.6% |
13.2% |
12.0% |
12.2% |
11.7% |
9.1% |
6.7% |
8.4% |
| Annualized Median Gain |
12.1% |
10.6% |
9.8% |
9.3% |
8.2% |
7.3% |
6.0% |
1.1% |
3.1% |
For detailed information about each predictability rank, please go to GuruFocus Research: What worked in the market from 1998-2008? Part I: Introduction of Predictability Rank
Also read:
Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety
Ainos (AIMD) Business Description
Traded in Other Exchanges
N/A
Address
8880 Rio San Diego Drive, Suite 800, San Diego, CA, USA, 92108
Ainos Inc is engaged in developing biologics for the treatment of human and animal diseases. The company mainly focuses on the research of the treatment of human disease indications, particularly influenza, hepatitis C, thrombocytopenia, and other indications using natural human interferon-alpha that is administered in a proprietary low dose oral form.
Executives
| Meng Lin Sung |
officer: Chief Financial Officer |
8880 RIO SAN DIEGO DRIVE, STE 800, SAN DIEGO CA 92108 |
| Ting-chuan Lee |
director |
8880 RIO SAN DIEGO DRIVE, SUITE 800, SAN DIEGO CA 92108 |
| Ainos Inc |
10 percent owner |
8880 RIO SAN DIEGO DRIVE, SUITE 800, SAN DIEGO CA 92108 |
| Pao-sheng Wei |
director |
10F NO 180 SECTION 2, JIANGUO N RD, TAIPEI F5 104071 |
| Chun-hsien Tsai |
director, officer: Chairman, CEO, CFO |
8880 RIO SAN DIEGO DRIVE, SUITE 800, SAN DIEGO CA 92108 |
| Chung-jung Tsai |
director |
8880 RIO SAN DIEGO DRIVE, SUITE 800, SAN DIEGO CA 92108 |
| Yao-chung Chiang |
director |
5F, 7 ALY 69, LANE 161, TUNHUA S RD., SEC 1, TAIPEI F5 10675 |
| Wen-han Chang |
director |
NO 463 FL 4, MING-SHUE ROAD, TAIPEI F5 104046 |
| Lawrence K Lin |
other: EVP - OPERATIONS |
2871 NETTLE CREEK COURT, CHULA VISTA CA 92108 |
| Hui-lan Wu |
officer: Chief Financial Officer |
8880 RIO SAN DIEGO DRIVE, SUITE 800, SAN DIEGO CA 92108 |
| Hsiu-chen Chiu |
director |
9F-1, NO 22, AIGUO E RD, ZHONGZHENG DIST, TAIPEI F5 100408 |
| Chung-yi Tsai |
director |
105 SEQUOIA CT, LOS GATOS CA 95032 |
| Stephen T Chen |
director |
1 GROVE ST, UNIT 812007, WELLESLEY MA 02482-8201 |
| Bernard H Cohen |
officer: VP, CFO |
4134 BUSINESS PARK DRIVE, AMARILLO TX 79110 |
| Dennis Dean Moore |
director |
402 FISH HATCHERY ROAD, HAMILTON MT 59840 |
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
AIMD has been successfully added to your