FG Group Holdings (FG Group Holdings) Predictability Rank

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What is FG Group 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.

FG Group 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

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FG Group Holdings (FG Group Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » FG Group Holdings Inc (AMEX:FGH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

5960 Fairview Road, Suite 275, Charlotte, NC, USA, 28210

Website

https://www.fg.group

FG Group Holdings Inc is a holding company with business operations in the entertainment industry and holdings in public and privately held companies. It manufactures and distributes projection screens and provides technical support services and other related products and services to the cinema exhibition industry, theme parks, schools, museums, and other entertainment-related markets. It also distributes and supports third-party products, including digital projectors, servers, library management systems, menu boards, and sound systems. It generates majority revenue from Strong Entertainment business segment.

Executives

Fundamental Global Gp, Llc	10 percent owner	108 GATEWAY BLVD., SUITE 204, MOORESVILLE NC 28117
Ballantyne Strong Holdings, Llc	10 percent owner	108 GATEWAY BLVD., SUITE 204, MOORESVILLE NC 28117
Joseph H Moglia	10 percent owner	AMERITRADE HOLDING CORP, 4211 S 102ND ST, OMAHA NE 68127
Kyle Cerminara	director, 10 percent owner	C/O FUNDAMENTAL GLOBAL INVESTORS, LLC, 108 GATEWAY BLVD., SUITE 204, MOORESVILLE NC 28117
Michael C Mitchell	director	C/O BALLANTYNE STRONG, INC., 4201 CONGRESS STREET, SUITE 175, CHARLOTTE NC 28209
Swets Larry G Jr	director	105 S. MAPLE ST., ITASCA IL 60143
Fundamental Global Investors, Llc	director, 10 percent owner	136 CORPORATE PARK DRIVE, SUITE G, MOORESVILLE NC 28117
Todd Robert Major	officer: CFO, Sec. & Treas.	4201 CONGRESS STREET, SUITE 175, CHARLOTTE NC 28209
Lewis M Johnson	director, 10 percent owner	C/O FUNDAMENTAL GLOBAL INVESTORS, LLC, 108 GATEWAY BLVD., SUITE 204, MOORESVILLE NC 28117
Mark D. Roberson	officer: CFO	27271 LAS RAMBLAS, STE. 200, MISSION VIEJO CA 92691
Jack H Jacobs	director	101 OAKS ROAD, MILLINGTON NJ 07946
Stephen L. Schilling	officer: President, CMS	C/O BALLANTYNE STRONG, INC., 13710 FNB PARKWAY, SUITE 400, OMAHA NE 68154
Lance V. Schulz	officer: CFO	C/O BALLANTYNE STRONG, INC., 11422 MIRACLE HILLS DRIVE, SUITE 300, OMAHA NE 68154
Robert J Roschman	director	1759 SE 10TH STREET, FORT LAUDERDALE FL 33316
Ryan M. Burke	officer: SVP & CFO	C/O BALLANTYNE STRONG, INC., 13710 FNB PARKWAY, SUITE 400, OMAHA NE 68154