Dynatronics (Dynatronics) 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.

Dynatronics 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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Dynatronics (Dynatronics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Dynatronics Corp (NAS:DYNT) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

1200 Trapp Road, Eagan, MN, USA, 55121

Website

https://www.dynatronics.com

Dynatronics Corp is a United States-based company that is engaged in designing, manufacturing, and distributing advanced-technology medical devices, therapeutic and medical treatment tables, rehabilitation equipment, custom athletic training treatment tables and equipment, institutional cabinetry as well as other rehabilitation and therapy products and supplies. The company markets and sells its products to physical therapists, chiropractors, athletic trainers, sports medicine practitioners, and other medical professionals and institutions. It offers customers a one-stop-shop for their medical equipment and supply needs, including electrotherapy, therapeutic ultrasound, phototherapy, rehabilitation products, treatment tables, customized training room products, and exercise products.

Executives

Gabriel Ellwein	officer: Chief Financial Officer	4782 HIGHCROFT COURT, EAGAN MN 55122
John Anthony Krier	director, officer: Chief Executive Officer	319 WEST 50TH SOUTH, MINNEAPOLIS MN 55419
David B Holtz	director	311 C ENTERPRISE DRIVE, PLAINSBORO NJ 08536
Scott Klosterman	director
R Scott Ward	director	1064 S. CRESTVIEW CIRCLE, SLC VA 84108
Stuart Essig	10 percent owner	311 C ENTERPRISE DRIVE, PLAINSBORO NJ 08536
Erin S. Enright	director	666 PLAINSBORO ROAD, PLAINSBORO NJ 08536
Brian Larkin	director	INTEGRA LIFESCIENCES CORPORATION, 311 ENTERPRISE DRIVE, PLAINSBORO NJ 08536
Brian D. Baker	officer: Chief Operating Officer	C/O SEASPINE HOLDINGS CORPORATION, 2302 LA MIRADA DRIVE, VISTA CA 92081
Provco Ventures 1 Lp	10 percent owner	795 E LANCASTER AVE SUITE 200, VILLANOVA PA 19085
Norman Iii Roegner	officer: Chief Financial Officer	1200 TRAPP ROAD, EAGAN MN 55121
Skyler N Black	officer: Corporate Controller	1448 E LEXI LN, COTTONWOOD HEIGHTS UT 84093
Keeler Jennifer Bennett Bennett	officer: Secretary / General Counsel	8620 STILLWATER BLVD N, LAKE ELMO MN 55042
Daryl Connell	officer: Chief Information Officer	932 MINJON DRIVE, APPLE VALLEY MN 55124
Cynthia L. Mchenry	officer: VP, Operations	7030 PARK CENTRE DRIVE, COTTONWOOD HEIGHTS UT 84121