Fresh Del Monte Produce (Fresh Del Monte Produce) Predictability Rank

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What is Fresh Del Monte Produce Predictability Rank?

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.

Fresh Del Monte Produce 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

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Fresh Del Monte Produce (Fresh Del Monte Produce) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Fresh Del Monte Produce Inc (NYSE:FDP) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

FDM:Germany FDM:Germany

Address

87 Mary Street, George Town, P.O. Box 698, 4th Floor, Apollo House, c/o H&C Corporate Services Ltd, Grand Cayman, CYM, KY1-1107

Website

https://www.freshdelmonte.com

Fresh Del Monte Produce Inc is an integrated producer, marketer & distributor of high-quality & fresh-cut fruit & vegetables. It operates in three segments, Fresh and value-added products segment, which includes pineapples, fresh-cut fruit, fresh-cut vegetables, melons, vegetables, non-tropical fruit, other fruit and vegetables, avocados, and prepared foods, Banana segment & Other products and services segment, including the third-party freight & logistic services business & the Jordanian poultry and meats business. The majority is from the Fresh and value-added products segment. Geographically, it operates in North America, Europe, Asia, the Middle East, and Other, out of which the highest is from North America.

Executives

Jesus Rodriguez Calvo	officer: SVP, NA Sales & Marketing	C/O FRESH DEL MONTE PRODUCE INC, P.O. BOX 149222, CORAL GABLES FL 33114
Tarek Ahmad Betti	officer: Chief Human Resources Officer	C/O FRESH DEL MONTE PRODUCE INC., P.O. BOX 149222, CORAL GABLES FL 33114
Michael J Berthelot	director	P O BOX 7277, RANCHO SANTA FE CA 92067
Mohammed Abbas	officer: V.P. Middle East and N. Africa	C/O FRESH DEL MONTE PRODUCE INC., P.O. BOX 149222, CORAL GABLES FL 33134
Monica Vicente	officer: SVP, Chief Financial Officer	C/O FRESH DEL MONTE PRODUCE INC., P.O. BOX 149222, CORAL GABLES FL 33114
Effie D Silva	officer: SVP, General Counsel & Secy	C/O FRESH DEL MONTE PRODUCE INC., P.O. BOX 149222, CORAL GABLES FL 33114
Reyes Jorge Pelaez	officer: VP, Central America	C/O FRESH DEL MONTE PRODUCE INC., PO BOX 149222, CORAL GABLES FL 33114
Sergio Mancilla	officer: VP South America	C/O FRESH DEL MONTE PRODUCE INC., P.O. BOX 149222, CORAL GABLES FL 33114
Hans Sauter	officer: SVP, R&D and Agriculture	C/O FRESH DEL MONTE PRODUCE INC.,, PO BOX 149222, CORAL GABLES FL 33114
Ziad Nabulsi	officer: SVP, North American Operations	C/O FRESH DEL MONTE PRODUCE INC, P.O. BOX 149222, CORAL GABLES FL 33114
Helmuth Lutty	officer: SVP, Shipping Operations	C/O FRESH DEL MONTE PRODUCE INC., PO BOX 149222, CORAL GABLES FL 33114
Gianpaolo Renino	officer: V.P. Europe and Africa	C/O FRESH DEL MONTE, INC., PO BOX 149222, CORAL GABLES FL 33134
Mohammad Abu-ghazaleh	director, 10 percent owner, officer: Chief Executive Officer	P.O. BOX 149222, CORAL GABLES FL 33114-9222
Eduardo Guarita Bezerra	officer: SVP and CFO	C/O FRESH DEL MONTE PRODUCE INC., PO BOX 149222, CORAL GABLES FL 33134
Marlene Gordon	officer: SVP, General Counsel	C/O FRESH DEL MONTE PRODUCE INC.,, PO BOX 149222, CORAL GABLES FL 33134