Global Blood Therapeutics (Global Blood Therapeutics) Predictability Rank

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What is Global Blood Therapeutics 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.

Global Blood Therapeutics 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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Global Blood Therapeutics (Global Blood Therapeutics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Global Blood Therapeutics Inc (NAS:GBT) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

181 Oyster Point Boulevard, South San Francisco, CA, USA, 94080

Website

https://www.gbt.com

Global Blood Therapeutics Inc operates in the healthcare sector of the United States. It discovers and develops novel therapeutics to address blood-based disorders. GBT440, its lead drug candidate targets the underlying mechanism of red blood cell (RBC) sickling, which provides the potential to treat sickle cell disease. GBT440. an oral, once-daily therapy arrests abnormal hemoglobin polymerization, the underlying mechanism of RBC sickling. In addition, the company is engaged in other research and development activities targeted at hereditary angioedema and owns exclusively licensed rights to its portfolio of product candidates in the United States, Europe, and other major markets.

Executives

Jeffrey S Farrow	officer: Chief Financial Officer	TWO CORPORATE DRIVE, SOUTH SAN FRANCISCO CA 94080
Nazila Habibizad	officer: See Remarks	C/O GLOBAL BLOOD THERAPEUTICS, INC. 181 OYSTER POINT BLVD SOUTH SAN FRANCISCO CA 94080
Dawn Svoronos	director	C/O MEDIVATION, INC., 525 MARKET ST., 36TH FLOOR, SAN FRANCISCO CA 94105
Philip A. Pizzo	director	ONE COMMERCE STREET, SUITE 2550, MEMPHIS TN 38103
Scott W Morrison	director	C/O GLOBAL BLOOD THERAPEUTICS, INC., 400 EAST JAMIE COURT SUITE 101, SOUTH SAN FRANCISCO CA 94080
Carrie Krehlik	officer: Chief Human Resources Officer	6015 COLTON BLVD, OAKLAND CA 94611
Eric Fink	officer: Chief Human Resources Officer	C/O GLOBAL BLOOD THERAPEUTICS, INC. 171 OYSTER POINT BLVD., SUITE 300 SOUTH SAN FRANCISCO CA 94080
Kim Smith-whitley	officer: See Remarks	C/O GLOBAL BLOOD THERAPEUTICS, INC. 181 OYSTER POINT BLVD. SOUTH SAN FRANCISCO CA 94080
Alexis A. Thompson	director	C/O GLOBAL BLOOD THERAPEUTICS, INC. 181 OYSTER POINT BLVD. SOUTH SAN FRANCISCO CA 94080
Brian Edwin Cathers	officer: Chief Scientific Officer	C/O GLOBAL BLOOD THERAPEUTICS, INC. 171 OYSTER POINT BLVD., SUITE 300 SOUTH SAN FRANCISCO CA 94080
Lesley Ann Calhoun	officer: See Remarks	C/O GLOBAL BLOOD THERAPEUTICS, INC., 171 OYSTER POINT BOULEVARD, SUITE 300, SOUTH SAN FRANCISCO CA 94080
Mark L Perry	director	176 WEST BLITHEDALE AVE, MILL VALLEY CA 94941
Ted W Love	director, officer: See Remarks	C/O GLOBAL BLOOD THERAPEUTICS, INC., 400 EAST JAMIE COURT, SUITE 101, SOUTH SAN FRANCISCO CA 94080
Tricia Borga Suvari	officer: Chief Legal Officer	3172 PORTER DRIVE PALO ALTO CA 94034
Brown Willie L. Jr.	director	C/O GLOBAL BLOOD THERAPEUTICS, INC. 400 EAST JAMIE COURT, SUITE 101 SOUTH SAN FRANCISCO CA 94080