What is Eagle Bulk Shipping Predictability Rank?
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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.
Eagle Bulk Shipping 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
Eagle Bulk Shipping (Eagle Bulk Shipping) Business Description
Traded in Other Exchanges
Address
300 First Stamford Place, 5th Floor, Stamford, CT, USA, 06902
Eagle Bulk Shipping Inc is a U.S.-based, fully integrated shipowner-operator, providing global transportation solutions to miners, producers, traders and end users. The company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership, charter and operation of drybulk vessels. The company focuses on the versatile midsize drybulk vessel segment. The Company's fleet is comprised of Supramax and Ultramax drybulk carriers.
Executives
| Justin A. Knowles |
director |
9-10 ST. ANDREW SQUARE, EDINBURGH X0 EH2 2AF |
| Castor Maritime Inc. |
10 percent owner |
CHRISTODOULOU CHATZIPAVLOU 223, HAWAII ROYAL GARDENS, APART. 16, LIMASSOL G4 3036 |
| Gary Vogel |
director, officer: Chief Executive Officer |
C/O EAGLE BULK SHIPPING INC., 477 MADISON AVENUE, NEW YORK NY 10022 |
| Oaktree Fund Gp I, L.p. |
10 percent owner |
333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071 |
| Danaos Corp |
10 percent owner |
14 AKTI KONDYLI, 185 45 PIRAEUS, ATHENS J3 00000 |
| Oaktree Capital I, L.p. |
10 percent owner |
333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071 |
| Ocm Holdings I, Llc |
10 percent owner |
333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071 |
| Oaktree Holdings, Llc |
10 percent owner |
333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071 |
| Oaktree Fund Gp, Llc |
10 percent owner |
333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071 |
| Bam Partners Trust |
10 percent owner |
181 BAY STREET, SUITE 300, TORONTO A6 M5J 2T3 |
| Tsoutsoplides Constantine |
officer: Chief Financial Officer |
C/O EAGLE BULK SHIPPING INC., 300 FIRST STAMFORD PLACE, STAMFORD CT 06902 |
| Alexandra Kate Blankenship |
director |
33 BENEDICT PLACE, 2ND FLOOR, GREENWICH CT 06830 |
| De Costanzo Frank |
officer: Chief Financial Officer |
C/O EAGLE BULK SHIPPING INC., 300 FIRST STAMFORD PLACE, 5TH FLOOR, STAMFORD CT 06902 |
| Randee E Day |
director |
217 DEBRA LANE, PALM BEACH FL 33480 |
| Oaktree Capital Group Holdings Gp, Llc |
10 percent owner |
333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071 |
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