EEKA Fashion Holdings (HKSE:03709) Predictability Rank

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What is EEKA Fashion Holdings 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.

EEKA Fashion Holdings 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

EEKA Fashion Holdings Predictability Rank Related Terms

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EEKA Fashion Holdings (HKSE:03709) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » EEKA Fashion Holdings Ltd (HKSE:03709) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

Terra 4th Road, 26thFloor, B Block, Terra Licheng Building, Futian District, Guangdong Province, Shenzhen, CHN, 518040

Website

http://www.eekagroup.com

EEKA Fashion Holdings Ltd is a women's clothing manufacturer and retailer in China. Its high-end Koradior, La Koradior and Koradior Elsewhere brands target women between 30 and 45 years old with dresses, skirts, trousers, shirts, knitwear, vests, jackets, overcoats, scarves, and accessories. The vast majority of its sales are direct to customers through company-operated retail stores. The company also sells its items through third-party e-commerce platforms and through distributor-operated retail stores. Virtually all of its revenue is generated in China.

Executives

Ca Indosuez (switzerland) Sa, Hong Kong Branch	2303 Depositary
Bos Trustee Limited	2201 Interest of corporation controlled by you
Koradior Investments Limited	2101 Beneficial owner
Mayberry Marketing Limited	2201 Interest of corporation controlled by you
Jin Ming	2307 Founder of a discretionary trust who can infl
Jin Ming	2307 Founder of a discretionary trust who can infl
Apex Noble Holdings Limited	2101 Beneficial owner
Heritage Holdings Ltd	2201 Interest of corporation controlled by you
Jin Rui	2307 Founder of a discretionary trust who can infl
Bos Trustee Limited As Trustee	2201 Interest of corporation controlled by you

EEKA Fashion Holdings (HKSE:03709) Headlines

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