Autodesk (Autodesk) Predictability Rank

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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.

Autodesk 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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Autodesk (Autodesk) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Autodesk Inc (NAS:ADSK) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

ADSK:Mexico 1ADSK:Italy AUD:Germany AUD:Germany A1UT34:Brazil ADSK:Austria

Address

One Market Street, Suite 400, San Francisco, CA, USA, 94105

Website

https://www.autodesk.com

Founded in 1982, Autodesk is an application software company that serves industries in architecture, engineering, and construction; product design and manufacturing; and media and entertainment. Autodesk software enables design, modeling, and rendering needs of these industries. The company has over 4 million paid subscribers across 180 countries.

Executives

Mary T Mcdowell	director
Stacy J Smith	director	2200 MISSION COLLEGE BLVD., RNB-4-151, SANTA CLARA CA 95054
Rebecca Pearce	officer: EVP, Chief People Officer	111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
Betsy Rafael	director	550 MERIDIAN AVENUE, SAN JOSE CA 95126
Stephen W. Hope	officer: VP & Chief Accounting Officer	111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
Lorrie M Norrington	director	C/O EBAY INC., 2145 HAMILTON AVENUE, SAN JOSE CA 95125
Andrew Anagnost	director, officer: President and CEO	111 MCINNIS PARKWAY, AUTODESK, INC., SAN RAFAEL CA 94903
Deborah Clifford	officer: EVP & Chief Financial Officer	4300 NORTH FIRST STREET, SAN JOSE CA 95134
Ayanna Howard	director	111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
Rami Rahim	director	1194 N. MATHILDA AVE., SUNNYVALE CA 94089
Ruth Ann Keene	officer: EVP, Corp Affairs, CLO	C/O UNITY SOFTWARE INC., 30 - 3RD STREET, SAN FRANCISCO CA 94103
Di Fronzo Pascal W	officer: EVP, Corp Affairs, CLO & Sec	AUTODESK, INC., 111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
Steven M Blum	officer: Chief Revenue Officer	111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
French R Reid Jr	director	C/O INTERGRAPH CORP, 288 DUNLOP BLVD, HUNTSVILLE AL 35824
Stephen D Milligan	director	C/O WESTERN DIGITAL CORPORATION, 5601 GREAT OAKS PARKWAY, SAN JOSE CA 95119