Manhattan Bridge Capital (Manhattan Bridge Capital) Predictability Rank

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What is Manhattan Bridge Capital 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.

Manhattan Bridge Capital 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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Manhattan Bridge Capital (Manhattan Bridge Capital) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Manhattan Bridge Capital Inc (NAS:LOAN) » Definitions » Predictability Rank

Comparable Companies

CHMI ACR LFT AJX EARN SACH MITT SEVN GPMT NREF NLY AGNC STWD RITM BXMT ABR ARI RC LADR TWO

Traded in Other Exchanges

N/A

Address

60 Cutter Mill Road, Suite 205, Great Neck, NY, USA, 11021

Website

https://www.manhattanbridgecapital.com

Manhattan Bridge Capital Inc is a real estate finance company taxed as a REIT that specializes in originating, servicing and managing a portfolio of first mortgage loans. The company offers short-term, secured, non-banking loans which may renew or extend, before or after their initial term expires, to real estate investors to fund their acquisition, renovation, rehabilitation or development of residential or commercial properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida.

Executives

Assaf Ran	director, 10 percent owner, officer: President & CEO	C/O DAG MEDIA INC, 125-10 QUEENS BOULEVARD, KEN GARDENS NY 11415
Michael Jackson	director	AGENCY.COM, 20 EXCHANGE PL, NEW YORK NY 10005
Lyron L Bentovim	director	60 CUTTER MILL ROAD, GREAT NECK, NEW YORK NY 11021
Vanessa Kao	officer: CFO	C/O MANHATTAN BRIDGE CAPITAL, INC., 60 CUTTER MILL ROAD, GREAT NECK NY 11021
Eran Goldshmid	director	C/O DAG MEDIA INC, 125-10 QUEENS BOULEVARD, KEN GARDENS NY 11415
Phillip Michals	director	C/O DAG MEDIA INC, 125-10 QUEENS BOULEVARD, KEN GARDENS NY 11415
Inbar Evron-yogev	officer: Chief Financial Officer	792 COLUMBUS AVENUE, NEW YORK NY 10025
Mark Alhadeff	director	520 EAST 11TH STREET, NEW YORK NY 10009
Yael Shimor Golan	director, officer: CFO	247 W 57TH ST, NEW YORK NY 10019
Hummingbird Value Fund Lp	10 percent owner, other: See footnote 1.	145 E. 57TH STREET, 8TH FLOOR, NEW YORK NY 10022
Hummingbird Management Llc	10 percent owner, other: See footnote 1.	145 E. 57TH STREET, 8TH FLOOR, NEW YORK NY 10022
Paul D Sonkin	10 percent owner, other: See footnote 1.	145 E. 57TH STREET, 8TH FLOOR, NEW YORK NY 10022
Hummingbird Microcap Value Fund Lp	10 percent owner, other: See footnote 1.	145 E. 57TH STREET, 8TH FLOOR, NEW YORK NY 10022
Hummingbird Capital Llc	10 percent owner, other: See footnote 1.	145 E. 57TH STREET, 8TH FLOOR, NEW YORK NY 10022
Stephen A Zelnick	director