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Knife River Holding Co (Knife River Holding Co) Predictability Rank


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What is Knife River Holding Co 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.

Knife River Holding Co 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

Knife River Holding Co Predictability Rank Related Terms

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Knife River Holding Co (Knife River Holding Co) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » Knife River Holding Co (NYSE:KNF) » Definitions » Predictability Rank
Comparable Companies
BCC SUM TGLS USLM EXP SMID BASA RETO CAPS CRH XSWX:HOLN NSE:ULTRACEMCO VMC MLM SHSE:600585 XKRX:003670 NSE:GRASIM XTER:HEI BOM:500387 ASX:JHX
Traded in Other Exchanges
N/A
Address
1150 West Century Avenue, Bismarck, ND, USA, 58503
Website
https://www.kniferiver.com
Knife River Holding Co formerly Knife River Corp provides construction materials and contracting services throughout the western, central, and southern United States. Knife River produces and delivers aggregates and markets crushed stone, sand, gravel, and related construction materials, including ready-mix concrete, asphalt, and other value-added products. It also distributes cement and asphalt oil. It has more than 1 billion tons of aggregate reserves, 110 ready-mix plants, 50 asphalt plants, and a combined 410,000 tons of liquid asphalt and cement storage. The company also performs integrated contracting services for most types of aggregate-related construction, including roads, freeways, bridges, residential properties, schools, shopping centers, office buildings, and industrial parks.
Executives
Thomas S Everist director
William J Sandbrook director C/O U.S. CONCRETE, INC., 331 N. MAIN STREET, EULESS TX 76039
Trevor J Hastings officer: Vice President & COO 1250 WEST CENTURY AVENUE, BISMARCK ND 58503
Karen B Fagg director P. O. BOX 5650, BISMARCK ND 58506-5650
German Carmona-alvarez director 1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Glenn R. Pladsen officer: VP of Support Services 1150 WEST CENTURY AVENUE, BISMARCK ND 58503
John F. Quade officer: VP of Business Development 1150 WEST CENTURY AVENUE, BISMARCK ND 58503
Marney L. Kadrmas officer: Chief Accounting Officer 1150 WEST CENTURY AVENUE, BISMARCK ND 58503
Patricia L Moss director 1100 N.W. WALL STREET, P.O. BOX 369, BEND OR 97701
Jason L Vollmer director 1200 WEST CENTURY AVENUE, BISMARCK ND 58503
David L Goodin director, officer: Chair of the Board 400 NORTH FOURTH STREET, BISMARCK ND 58501
Nathan W Ring officer: Vice President & CFO 1150 WEST CENTURY AVENUE, BISMARCK ND 58503
Karl A Liepitz director, officer: General Counsel & Secretary 1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Brian R. Gray director, officer: President & CEO 1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Mdu Resources Group Inc 10 percent owner 1200 WEST CENTURY AVENUE, BISMARCK ND 58503