Guaranty Bancshares (Guaranty Bancshares) Predictability Rank

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What is Guaranty Bancshares 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.

Guaranty Bancshares 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

Guaranty Bancshares Predictability Rank Related Terms

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Guaranty Bancshares (Guaranty Bancshares) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Guaranty Bancshares Inc (NYSE:GNTY) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

16475 Dallas Parkway, Suite 600, Addison, TX, USA, 75001

Website

https://www.gnty.com

Guaranty Bancshares Inc is a bank holding company conducting banking activities through its wholly-owned subsidiary. The company provides its customers with a full array of relationship-driven commercial and consumer banking products and services, as well as mortgage, trust, and wealth management products and services that are tailored to meet the needs of small and medium-sized businesses, professionals, and individuals. It also provides other services such as Credit cards, Personal Loans, Account Management, Business Checking, Treasury Management, Business savings, and other related services. The company generates its revenue from interest on loans and investments, customer service and loan fees, fees related to the sale of mortgage loans, and trust and wealth management services.

Executives

James S. Bunch	director	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Jeffrey W Brown	director	1400 LAKE HEARN DR, ATLANTA GA 30319
Lisa S. Gallerano	officer: VP and General Counsel	16475 DALLAS PARKWAY, SUITE 600, ADDISON TX 75001
Shalene A. Jacobson	officer: Senior VP & Chief Risk Officer	16475 DALLAS PKWY, SUITE 100, ADDISON TX 75001
Charles A. Cowell	officer: Chm. & EVP-Guaranty Bank&Trust	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Richard W. Baker	director	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Sondra Cunningham	director	P.O. BOX 1158, MT. PLEASANT TX 75455
William Travis Brown	officer: Austin Area Chairman	P.O. BOX 1158, MT. PLEASANT TX 75455
Tyson T Abston	director, officer: Chairman and CEO	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Molly Curl	director	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Martin C Bell	officer: EVP - Guaranty Bank & Trust	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Randall R. Kucera	officer: VP and General Counsel	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Robert P. Sharp	officer: EVP - Guaranty Bank & Trust	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
William D. Priefert	director	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455
Daniel J. Muskrat	officer: EVP & CIO-Guaranty Bank&Trust	201 SOUTH JEFFERSON AVENUE, MOUNT PLEASANT TX 75455