Cash America International (Cash America International) Predictability Rank

View and export this data going back to 1987. Start your Free Trial

What is Cash America International 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.

Cash America International 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

Cash America International Predictability Rank Related Terms

Thank you for viewing the detailed overview of Cash America International's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Cash America International (Cash America International) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Cash America International Inc (NYSE:CSH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.cashamerica.com

Cash America International Inc was incorporated in 1984. The Company and its subsidiaries provide specialty financial services to individuals through retail services locations and e-commerce activities. It has two reportable segments: retail services and e-commerce. The retail services segment includes all of the operations of the Company's Retail Services Division, which is composed of both domestic and foreign storefront locations that offer some or all of the following services: pawn lending, consumer loans, check cashing and other ancillary services such as money orders, wire transfers and pre-paid debit cards. (Its ancillary services are provided through third-party vendors.) The e-commerce segment includes the operations of the Company's E-Commerce Division, which is composed of the Company's domestic and foreign online lending channels and the Company's MLOC channel. It offers short-term cash advances exclusively over the internet under the name CashNetUSA in the United States, under the name QuickQuid in the United Kingdom and under the name DollarsDirect in Australia and Canada. The Company operates its locations under the trade names Cash America Pawn, Cash America Payday Advance, Cashland, Mr. Payroll, SuperPawn, CashNetUSA QuickQuid, DollarsDirect and Prenda Facil. The Company's marks Cash America, Cashland, SuperPawn, CashNetUSA and Mr. Payroll are registered with the United States Patent and Trademark Office. The mark Prenda Facil is registered with the Mexican Industrial Property Institute. The principal competitors for its e-commerce segment in the United States include Miami Nation Enterprises, Integrity Advance, Think Finance and certain offshore lenders. In the United Kingdom, the Company believes that its principal online competitors include PaydayUK, PaydayExpress, Wonga and Lending Stream. In Australia, the Company believes its main online competitors are Nimble, Cash Converters and First Stop Money. In Canada, the industry has been dominated by storefront lenders and as a result, the Company's principal competitors are not online lenders but storefront lenders, such as Money Mart, The Cash Store and Cash Money. The Company's operations are subject to regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations.

Executives

James H Graves	director	ERWIN GRAVES & ASSOCIATES, 2100 MCKINNEY AVE STE 900, DALLAS TX 75205
Daniel E Berce	director	801 CHERRY STREET, SUITE 3900, C/O GM FINANCIAL COMPANY, INC., FORT WORTH TX 76102
Daniel R Feehan	director	CASH AMERICA INTL INC, 1600 W &TH ST, FORT WORTH TX 76102
Thomas Brent Stuart	director, officer: President and CEO	1600 W. 7TH STREET, FORT WORTH TX 76102
B D Hunter	director
Timothy S Ho	officer: President - E-Commerce Div.	C/O ONEMAIN HOLDINGS, INC., 601 N.W. SECOND STREET, EVANSVILLE IN 47708
David Fisher	officer: CEO of E-Commerce Division	39 SOUTH LASALLE STREET, SUITE 220, CHICAGO IL 60605
Morris Clifton H Jr	director	C/O AMERICREDIT CORP, 801 CHERRY ST, FORT WORTH TX 76102