Bottomline Technologies (Bottomline Technologies) Predictability Rank

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What is Bottomline Technologies 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.

Bottomline Technologies 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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Bottomline Technologies (Bottomline Technologies) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Bottomline Technologies Inc (NAS:EPAY) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

325 Corporate Drive, Portsmouth, NH, USA, 03801-6808

Website

https://www.bottomline.com

Bottomline Technologies Inc provides financial oriented solutions. It is a trusted and easy-to-use set of cloud-based digital banking, fraud prevention, payment, financial document, and healthcare solutions. Bottomline consists of four operating segments: Cloud Solutions segment provides customers predominately with SaaS technology offerings that facilitate electronic payment, electronic invoicing and spend management; Digital Banking segment provides solutions that are specifically designed for banking and financial institution customers; Payments and Transactional Documents segment is a supplier of software products that provide a range of financial business process management solutions; and Other segment consists of healthcare and cyber fraud and risk management operating segments.

Executives

Larry A Klane	director	88 WEST PLUMERIA DRIVE, SAN JOSE CA 95134
Ken D'amato	director	320 NORWOOD PARK SOUTH NORWOOD MA 02062
Adam Bruce Bowden	director, officer: Chief Financial Officer	C/O BOTTOMLINE TECHNOLOGIES 325 CORPORATE DRIVE PORTSMOUTH NH 03801
Michael J Curran	director	BOTTOMLINE TECHNOLOGIES 325 CORPORATE DRIVE PORTSMOUTH NH 03801
Paul H Hough	director	325 CORPORATE DRIVE PORTSMOUTH NH 03885
Robinson Benjamin E Iii	director	325 CORPORATE DRIVE, PORTSMOUTH NH 03885
Jennifer M Gray	director	BOTTOMLINE TECHNOLOGIES 325 CORPORATE DRIVE PORTSMOUTH NH 03801
Joseph L Mullen	director	C/O BOTTOMLINE TECHNOLOGIES INC 325 CORPORATE DRIVE PORTSMOUTH NH 03801
Jeffrey C Leathe	director
Nigel K Savory	officer: Managing Director Europe	325 CORPORATE DRIVE PORTSMOUTH NH 03801
Norman J Deluca	officer: MD of Banking Solutions	BOTTOMLINE TECHNOLOGIES INC /DE/ 325 CORPORATE DRIVE PORTSMOUTH NH 03801
Robert A Eberle	director, officer: President & CEO	C/O BOTTOMLINE TECHNOLOGIES 325 CORPORATE DRIVE PORTSMOUTH NH 03801
Peter Gibson	director	325 CORPORATE DRIVE PORTSMOUTH NH 03885
Craig S Saks	officer: President	6060 COVENTRY DRIVE, ELKHORN NE 68022
Clearfield Capital Management Lp	other: SEE REMARKS	430 PARK AVENUE, 11TH FLOOR NEW YORK NY 10022