Flagstar Bancorp (Flagstar Bancorp) Predictability Rank

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What is Flagstar Bancorp Predictability Rank?

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.

Flagstar Bancorp 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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Flagstar Bancorp (Flagstar Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Flagstar Bancorp Inc (NYSE:FBC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

5151 Corporate Drive, Troy, MI, USA, 48098-2639

Website

https://www.flagstar.com

Flagstar Bancorp Inc is a thrift that originates, services, and sells loans across the United States. The bank has around $14.2 billion in assets and $7.8 billion in deposits. First mortgage, second mortgage, and commercial real estate loans collectively compose 88% of the bank's investment portfolio.

Executives

Karen Buck	officer: EVP and Director of Operations	5151 CORPORATE DRIVE, TROY MI 48098
Toan Huynh	director	5151 CORPORATE DRIVE, TROY MI 48098
Lori Jordan	director	5151 CORPORATE DRIVE, TROY MI 48098
David J Matlin	director
Peter Schoels	director	GLOBAL AERO LOGISTICS INC., 101 WORLD DRIVE, PEACHTREE CITY GA 30269
Mp Thrift Investments L.p.	10 percent owner	MATLINPATTERSON GLOBAL ADVISERS LLC, 520 MADISON AVENUE, 35TH FLOOR, NEW YORK NY 10022
Reginald E Davis	officer: EVP and President of Banking	5151 CORPORATE DRIVE, TROY MI 48098
Kristy Fercho	officer: EVP and President of Mortgage	5151 CORPORATE DRIVE, TROY MI 48098
Andrew W Ottaway	officer: Michigan Market President	5151 CORPORATE DRIVE, TROY MI 48098
Jennifer R Whip	director	621 PUGH ROAD, WAYNE PA 19087
Patrick M Mcguirk	officer: EVP and Gen Counsel	5151 CORPORATE DRIVE, TROY MI 48098
Leonard Ii Israel	officer: Exec VP	5151 CORPORATE DRIVE, TROY MI 48098
Andrew Fornarola	officer: EVP and Director Com Bnking	FLAGSTAR BANCORP INC, 5151 CORPORATE DRIVE, TROY MI 48098
Bruce E Nyberg	director	FLAGSTAR BANCORP INC, 5151 CORPORATE DRIVE, TROY MI 48098
Bryan Marx	officer: SVP Chief Accting Officer(PAO)	5151 CORPORATE DRIVE, TROY MI 48098