What is Dutch Bros Predictability Rank?
Not Rated
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.
Dutch Bros 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
Dutch Bros (Dutch Bros) Business Description
Traded in Other Exchanges
N/A
Address
110 SW 4th Street, Grants Pass, OR, USA, 97526
Dutch Bros Inc is an operator and franchisor of drive-thru coffee shops that are focused on serving hand-crafted beverages. The company's hand-crafted beverage-focused lineup features hot and cold espresso-based beverages, cold brew coffee products, proprietary energy drinks, tea, lemonade, smoothies and other beverages. The company has two reportable operating segments company-operated shops and franchising and other.
Executives
| Travis Boersma |
director, 10 percent owner, officer: Executive Chairman of Board |
C/O DUTCH BROS INC., PO BOX 1929, GRANTS PASS OR 97528 |
| Dm Trust Aggregator, Llc |
10 percent owner |
PO BOX 398, GRANTS PASS OR 97528 |
| Dm Individual Aggregator, Llc |
10 percent owner |
PO BOX 398, GRANTS PASS OR 97528 |
| Brian Maxwell |
officer: Chief Operating Officer |
C/O DUTCH BROS INC., PO BOX 1929, GRANTS PASS OR 97528 |
| Tsg7 A Management Llc |
10 percent owner |
C/O TSG CONSUMER PARTNERS, 1100 LARKSPUR LANDING CIRCLE, SUITE 360, LARKSPUR CA 94939 |
| Charles Jemley |
officer: Chief Financial Officer |
C/O FOUR CORNERS PROPERTY TRUST, INC., 591 REDWOOD HIGHWAY, SUITE 1150, MILL VALLEY CA 94941 |
| C. David Cone |
director |
4900 N. SCOTTSDALE ROAD, SUITE 2000, SCOTTSDALE AZ 85251 |
| Sullivan Sean B.a. |
director |
1201 DOWDELL LANE, SAINT HELENA CA 94574 |
| Victoria J Tullett |
officer: Chief Legal Officer |
C/O DUTCH BROS INC., 110 SW 4TH STREET, GRANTS PASS OR 97526 |
| Joth Ricci |
officer: CEO and President |
C/O DUTCH BROS INC., PO BOX 1929, GRANTS PASS OR 97528 |
| Tana Davila |
officer: Chief Marketing Officer |
110 SW 4TH STREET, GRANTS PASS OR 97526 |
| Christine Barone |
officer: President |
C/O YELP INC., 350 MISSION STREET, 10TH FLOOR, SAN FRANCISCO CA 94105 |
| John Patrick Graham |
officer: Chief Marketing Officer |
C/O ALIGN TECHNOLOGY INC., 2820 ORCHARD PARKWAY, SAN JOSE CA 94131 |
| Ann M Miller |
director |
ONE BOWERMAN DRIVE, BEAVERTON OR 97005 |
| Stephen Gillett |
director |
2401 UTAH AVE S, SEATTLE WA 98134 |
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