GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Luye Pharma Group Ltd (HKSE:02186) » Definitions » Predictability Rank

Luye Pharma Group (HKSE:02186) Predictability Rank


View and export this data going back to 2014. Start your Free Trial

What is Luye Pharma Group Predictability Rank?

1 (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.

Luye Pharma Group 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Luye Pharma Group Predictability Rank Related Terms

Thank you for viewing the detailed overview of Luye Pharma Group's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Luye Pharma Group (HKSE:02186) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Luye Pharma Group Ltd (HKSE:02186) » Definitions » Predictability Rank
Comparable Companies
HKSE:06600 HKSE:01558 HKSE:06185 HKSE:02877 HKSE:03613 HKSE:02096 HKSE:01349 HKSE:00512 HKSE:02005 HKSE:00460 ZTS XTER:MRK NSE:SUNPHARMA TSE:4502 LSE:HLN XTAE:TEVA TSE:4507 VTRS NBIX XSWX:SDZ
Traded in Other Exchanges
LYPHF:USA LUP:Germany LUP:Germany
Address
No. 15 Chuang Ye Road, High-tech Industrial Development Zone, Shandong, Yantai, CHN, 264003
Website
https://www.luye.cn
Luye Pharma Group Ltd is a China-based drug manufacturer that focuses on developing, producing, and selling pharmaceutical products. The company develops drugs related to diagnosing and treating cancer, the cardiovascular system, the alimentary tract, and the central nervous system. The company's highest revenue share comes from oncology drugs, followed by central nervous system drugs. The company develops drugs for global use in Asia, Europe, and the United States.
Executives
Ubs Group Ag 2201 Interest of corporation controlled by you
Liu Dianbo 2301 Trustee
Luye Life Sciences Group Ltd 2201 Interest of corporation controlled by you
Luye Pharma Holdings Ltd. 2201 Interest of corporation controlled by you
Nelumbo Investments Limited 2201 Interest of corporation controlled by you
Shorea Lbg 2201 Interest of corporation controlled by you
Luye Pharmaceutical Investment Co., Ltd. 2101 Beneficial owner
Ginkgo (ptc) Limited 2301 Trustee
Luye Pharmaceutical International Co., Ltd. 2201 Interest of corporation controlled by you
Yi Fang Da Ji Jin Guan Li You Xian Gong Si 2102 Investment manager
Hillhouse Nev Holdings Limited 2101 Beneficial owner
Hillhouse Investment Management, Ltd. 2102 Investment manager
Hillhouse Fund V, L.p. 2201 Interest of corporation controlled by you
Xin Ye Sheng Wu Yi Yao Kong Gu You Xian Gong Si
Yang Yu Fen

Luye Pharma Group (HKSE:02186) Headlines

No Headlines