What is US Concrete 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.
US Concrete 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
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
US Concrete (US Concrete) Business Description
Traded in Other Exchanges
N/A
Address
331 North Main Street, Euless, TX, USA, 76039
U.S. Concrete sells ready-mixed concrete in several major markets in the United States, primarily in Texas, northern California, and the New York metro area. While U.S. Concrete also produces aggregates in some of its markets and has made more acquisitions in this area in recent years, the company primarily uses its aggregates production internally for its ready-mixed concrete operations. During 2020, U.S. Concrete sold approximately 8.2 million cubic yards of ready-mixed concrete and approximately 12.6 million tons of aggregates.
Executives
| Sutherland Colin Mcgill |
director |
55 ROSE PARK DRIVE TORONTO A6 M4T 1R2 |
| Herbert A. Burton |
officer: Regional VP & GM - West |
C/O U.S. CONCRETE, INC. 331 N. MAIN ST. EULESS X1 76039 |
| Jeffrey W Roberts |
officer: Regional VP & GM - Central |
331 N. MAIN ST. EULESS TX 76039 |
| William J Sandbrook |
director |
C/O U.S. CONCRETE, INC., 331 N. MAIN STREET, EULESS TX 76039 |
| John E Kunz |
officer: SVP & Chief Financial Officer |
522 N. MACEWEN DRIVE, OSPREY FL 34229 |
| Rajan Penkar |
director |
C/O TRAVELCENTERS OF AMERICA INC., 24601 CENTER RIDGE ROAD, WESTLAKE OH 44145 |
| Michael D Lundin |
director |
C/O U.S. CONCRETE, INC. 331 N. MAIN STREET EULESS TX 76039 |
| Kurt Matthew Cellar |
director |
71 ROTON AVENUE, NORWALK CT 06853 |
| Theodore P Rossi |
director |
C/O U.S. CONCRETE, INC. 331 N. MAIN STREET EULESS TX 76039 |
| Susan M. Ball |
director |
13131 DAIRY ASHFORD, SUITE 600, SUGAR LAND TX 77478 |
| Gibson T Dawson |
officer: VP, Corporate Controller & CAO |
C/O U.S. CONCRETE, INC., 331 NORTH MAIN STREET, EULESS TX 76039 |
| Philip Daren Lesley |
officer: VP - USC Aggregates |
331 NORTH MAIN STREET EULESS TX 76039 |
| Scott Dryden |
officer: VP & GM - Polaris Materials |
C/O U.S. CONCRETE, INC. 331 N. MAIN ST. EULESS TX 76039 |
| Mark Baker Peabody |
officer: VP - Human Resources |
331 N. MAIN STREET EULESS TX 76039 |
| Ronnie A Pruitt |
officer: President & COO |
C/O U.S. CONCRETE, INC., 331 N. MAIN STREET, EULESS TX 76039 |
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