Tile Shop Holdings (Tile Shop Holdings) Predictability Rank

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What is Tile Shop 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.

Tile Shop 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

Tile Shop Holdings Predictability Rank Related Terms

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Tile Shop Holdings (Tile Shop Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Tile Shop Holdings Inc (NAS:TTSH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

2TS:Germany

Address

14000 Carlson Parkway, Plymouth, MN, USA, 55441

Website

https://www.tileshop.com

Tile Shop Holdings Inc is a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. It manufactures its setting and maintenance materials, such as thinset, grout, and sealers. The company's primary market is retail sales to consumers, contractors, designers, and home builders. The company's distribution centers are in Michigan, New Jersey, Oklahoma, Virginia, and Wisconsin.

Executives

Fund 1 Investments, Llc	10 percent owner	100 CARR 115, UNIT 1900, RINCON PR 00677
Mark Burton Davis	officer: VP Inv. Relations & CAO	C/O 14000 CARLSON PARKWAY, PLYMOUTH MN 55441
Pleasant Lake Partners Llc	10 percent owner	100 CARR 115 UNIT 1900, RINCON PR 00677
Karla Lunan	officer: Chief Financial Officer	C/O TILE SHOP HOLDINGS, INC., 14000 CARLSON PKWY., PLYMOUTH MN 55441
Deborah K Glasser	director	C/O TILE SHOP HOLDINGS, INC., 14000 CARLSON PARKWAY, PLYMOUTH MN 55441
Linda Solheid	director	C/O TILE SHOP HOLDINGS, INC., 14000 CARLSON PARKWAY, PLYMOUTH MN 55441
Robert A Rucker	director, 10 percent owner, officer: Chief Executive Officer	14000 CARLSON PARKWAY, PLYMOUTH MN 55441
Philip B Livingston	director	1241 EAST MAIN ST, STAMFORD CT 06902
Brc Partners Opportunity Fund, Lp	other: See Remarks	11100 SANTA MONICA BLVD. SUITE 800, LOS ANGELES CA 90025
B. Riley Financial, Inc.	other: See Remarks	11100 SANTA MONICA BLVD, SUITE 800, LOS ANGELES CA 90025
272 Capital Lp	10 percent owner	3811 TURTLE CREEK BLVD, SUITE 2100, DALLAS TX 75219
Bryant R Riley	other: See Remarks	C/O B. RILEY FINANCIAL, INC., 21255 BURBANK BLVD, SUITE 400, WOODLAND HILLS CA 91367
Wes Cummins	10 percent owner	4505 LORRAINE AVE, DALLAS TX 75205
B. Riley Securities, Inc.	other: See Remarks	11100 SANTA MONICA BLVD, SUITE 800, LOS ANGELES CA 90025
B. Riley Capital Management, Llc	other: See Remarks	11100 SANTA MONICA BLVD., SUITE 800, LOS ANGELES CA 90025