CAS Medical Systems (CAS Medical Systems) Predictability Rank

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What is CAS Medical Systems 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.

CAS Medical Systems 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

CAS Medical Systems Predictability Rank Related Terms

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CAS Medical Systems (CAS Medical Systems) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » CAS Medical Systems Inc (NAS:CASM) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

44 East Industrial Road, Branford, CT, USA, 06405

Website

http://www.casmed.com

CAS Medical Systems Inc is a medical technology company that develops, manufactures, and markets non-invasive patient monitoring products. The company's products are the FORE-SIGHT and FORE-SIGHT ELITE brand tissue oximeters and sensors. .

Executives

Alan Milinazzo	director	C/O ORTHOFIX INC, 10115 KINCEY AVENUE STE 250, HUNTERSVILLE NC 28078
Thomas M Patton	director, officer: President and CEO	C/O OSTEOTCH INC., 51 JAMES WAY, EATONTOWN NJ 07724
Kenneth R Weisshaar	director	875 PARK AVE APT 2D, NEW YORK NY 10021
James E Thomas	director, 10 percent owner	WOODS END ROAD, NEW CANAAN CT 06840
Thomas, Mcnerney & Partners Ii L.p.	10 percent owner	45 SOUTH 7TH STREET, SUITE 3060, Minneapolis MN 55402
Tmp Associates Ii Lp	10 percent owner	45 SOUTH SEVENTH STREET, SUITE 3060, MINNEAPOLIS MN 55402
Tmp Nominee Ii, Llc	10 percent owner	45 SOUTH SEVENTH STREET, SUITE 3060, MINNEAPOLIS MN 55402
Thomas, Mcnerney & Partners Ii, Llc	10 percent owner	45 SOUTH SEVENTH STREET, SUITE 3060, MINNEAPOLIS MN 55402
Acuta Capital Fund, Lp	10 percent owner	1301 SHOREWAY ROAD, SUITE 350, BELMONT CA 94002
James E Flynn	10 percent owner, other: Possible Member of 10% Group	780 THIRD AVENUE, 37TH FLOOR, NEW YORK NY 10017
Deerfield Management Company, L.p. (series C)	10 percent owner, other: Possible Member of 10% Group	345 PARK AVENUE SOUTH, 12TH FLOOR, NEW YORK NY 10010
Deerfield Mgmt L.p.	10 percent owner, other: Possible Member of 10% Group	780 THIRD AVENUE, 37TH FLOOR, NEW YORK NY 10017
Deerfield Special Situations Fund, L.p.	10 percent owner, other: Possible Member of 10% Group	780 3RD AVENUE, 37TH FLOOR, NEW YORK NY 10017
Deerfield Special Situations International Master Fund, L.p.	10 percent owner, other: Possible Member of 10% Group	780 THIRD AVENUE, 37TH FLOOR, NEW YORK NY 10017
Lawrence Burstein	director	C/O UNITY VENTURE CAPITAL ASSOCIATES LTD, 245 FIFTH AVENUE, SUITE 1500, NEW YORK NY 10016