What is Cantel Medical Predictability Rank?
2.5 (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.
Cantel Medical 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
Cantel Medical (Cantel Medical) Business Description
Traded in Other Exchanges
N/A
Address
150 Clove Road, 9th Floor, Little Falls, NJ, USA, 07424
Cantel Medical is a New Jersey-based manufacturer of hospital supplies for infection prevention, which include products used in endoscope disinfection, water purification systems for use in dialysis treatment, and dental supplies. The firm reports in four segments: medical (46% of fiscal 2020 sales), dental (32%), life sciences (19%), and dialysis (3%). Geographic exposure is primarily in the U.S., which accounts for about 75% of revenue, with international markets making up the remaining 25%.
Executives
| Ann E Berman |
director |
255 STATE STREET, BOSTON MA 02109 |
| Jeffrey Z Mann |
officer: SVP, General Counsel |
150 CLOVE ROAD, 9TH FLOOR, LITTLE FALLS NJ 07424 |
| George L Fotiades |
director, officer: Chief Executive Officer |
281 SUMMIT AVENUE, SUMMIT NJ 07901 |
| Charles M Diker |
director, 10 percent owner, officer: Chairman |
ONE NEW YORK PLAZA, NEW YORK NY 10004 |
| Shaun M. Blakeman |
officer: SVP - CFO |
C/O CANTEL MEDICAL CORP., 150 CLOVE ROAD, LITTLE FALLS NJ 07424 |
| Jean Casner |
officer: SVP and CHRO |
150 CLOVE ROAD, LITTLE FALLS NJ 07424 |
| Brian Capone |
officer: SVP and Princ. Accounting Ofr |
150 CLOVE ROAD, 9TH FLOOR, LITTLE FALLS NJ 07424 |
| Peter G Clifford |
officer: President and COO |
40 TOURNAMENT DRIVE SOUTH, HAWTHORN WOODS IL 60047 |
| Seth M Yellin |
officer: Executive Vice President |
150 CLOVE ROAD 9TH FLOOR LITTLE FALLS NJ 07424 |
| Laura L Forese |
director |
849 STONEWALL COURT FRANKLIN LAKES NJ 07417 |
| Peter Pronovost |
director |
JHU-QSRG 1909 THAMES ST. - 2ND FLOOR BALTIMORE MD 21231 |
| Anthony B Evnin |
director |
C/O VENROCK ASSOCIATES, 7 BRYANT PARK, 23RD FLOOR, NEW YORK NY 10018 |
| Ronnie Myers |
director |
TOURO COLLEGE OF DENTAL MEDICINE 40 SUNSHINE COTTAGE ROAD VALHALLA NY 10595 |
| Alan R Batkin |
director |
399 PARK AVENUE, 10TH FLOOR, NEW YORK NY 10022 |
| Karen Prange |
director |
1108 S RIO VISTA BLVD, FORT LAUDERDALE FL 33316 |
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