Equinix (Equinix) Predictability Rank

View and export this data going back to 2000. Start your Free Trial

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.

Equinix 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

Equinix Predictability Rank Related Terms

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

Equinix (Equinix) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Equinix Inc (NAS:EQIX) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

EQN2:Germany EQIX34:Brazil

Address

One Lagoon Drive, Redwood City, CA, USA, 94065

Website

https://www.equinix.com

Equinix operates 248 data centers in 71 markets worldwide. It generates 46% of total revenue in the Americas, 32% in Europe, the Middle East, and Africa, and 22% in Asia-Pacific. The firm has more than 10,000 customers, including 2,100 network providers, that are dispersed over five verticals: cloud and IT services, content providers, network and mobile services, financial services, and enterprise. About 70% of Equinix's revenue comes from renting space to tenants and related services, and more than 15% comes from interconnection. Equinix operates as a real estate investment trust.

Executives

Charles J Meyers	officer: CEO and President	301 VELOCITY WAY, 5TH FLOOR, FOSTER CITY CA 94404
Scott Crenshaw	officer: EVP, GM Digital Services	ONE FANATICAL PLACE, CITY OF WINDCREST, SAN ANTONIO TX 78133
Keith D Taylor	officer: VP Finance, CAO	301 VELOCITY WAY, 5TH FLOOR, FOSTER CITY CA 94404
Brandi Galvin	officer: General Counsel	301 VELOCITY WAY, 5TH FLOOR, FOSTER CITY CA 94404
Michael Earl Campbell	officer: Chief Sales Officer	1 LAGOON DRIVE, REDWOOD CITY CA 94065
Jonathan Lin	officer: EVP, GM, Data Center Services	C/O EQUINIX, INC., ONE LAGOON DRIVE, REDWOOD CITY CA 94065
Camp Peter Van	director, officer: Chief Executive Officer	C/O PACKETEER INC, 10201 N DEANZA BLVD, CUPERTINO CA 95014
Gary Hromadko	director, 10 percent owner, other: Affiliate of Director	301 VELOCITY WAY 5TH FLOOR, FOSTER CITY CA 94404
Christopher B Paisley	director	14870 THREE OAKS COURT, SARATOGA CA 95070
Simon Miller	officer: Chief Accounting Officer	1 LAGOON DR, REDWOOD CITY CA 94065
Fidelma Russo	director	C/O IRON MOUNTAIN INCORPORATED, ONE FEDERAL STREET, BOSTON MA 02110
Karl Strohmeyer	officer: Chief Customer & Rev Officer	ONE LAGOON DRIVE, 4TH FLOOR, REDWOOD CITY CA 94065
Thomas S Olinger	director	C/O AMB PROPERTY CORPORATION, PIER 1, BAY 1, SAN FRANCISCO CA 94111
Jeetendra I Patel	director	200 E. RANDOLPH DRIVE, CHICAGO IL 60601
Ron Guerrier	director	C/O EXPRESS SCRIPTS HOLDING COMPANY, ONE EXPRESS WAY, ST. LOUIS MO 63121