Fuel Tech (Fuel Tech) Predictability Rank

View and export this data going back to 1993. Start your Free Trial

What is Fuel Tech 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.

Fuel Tech 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

Fuel Tech Predictability Rank Related Terms

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

Fuel Tech (Fuel Tech) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Fuel Tech Inc (NAS:FTEK) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

FUE1:Germany

Address

27601 Bella Vista Parkway, Warrenville, IL, USA, 60555-1617

Website

http://www.ftek.com

Fuel Tech Inc is an technology provider of boiler optimization, efficiency improvement, and air pollution reduction to utility and industrial customers. The company operates in two segments, Air Pollution Control and Fuel Chem. The Air Pollution Control technology segment includes technologies to reduce NOx emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources. TheFuel Chem technology segment uses chemical processes in combination with advanced Computational Fluid Dynamics and Chemical Kinetics Modeling boiler modeling for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using TIFI Targeted In-Furnace Injection technology.

Executives

Vincent J Arnone	officer: Executive Vice President
Bettye J Bailey	10 percent owner	C/O WHITMAN BREED ABBOTT & MORGAN LLC, 9 GREENWICH OFFICE PARK, GREENWICH CT 06831
Ellen T Albrecht	officer: Acting PFO and Treasurer	C/O FUEL TECH, 695 E MAIN STREET, STAMFORD CT 06901
Dennis L Zeitler	director	P.O. BOX 426, PITTSBURGH PA 15230
James J Markowsky	director	27601 BELLA VISTA PARKWAY, WARRENVILLE IL 60555
Douglas G Bailey	director, officer: President, CEO & Chairman
Cummings William E Jr	officer: Senior Vice President, Sales	C/O FUEL TECH, 27601 BELLA VISTA PARKWAY, WARRENVILLE IL 60555
James M Pach	officer: Acting PFO & Treasurer	27601 BELLA VISTA PARKWAY, WARRENVILLE IL 60555
Sharon L Jones	director	27601 BELLA VISTA PARKWAY, WARRENVILLE IL 60555
David S Collins	officer: Sr. Vice President	C/O FUEL TECH, 27601 BELLA VISTA PARKWAY, WARRENVILLE IL 60555
W Grant Gregory	director	C/O AMBAC FINANCIAL GROUP INC, 1 STATE STREET PLAZA, NEW YORK NY 10004
Delbert L Williamson	director	C/O FUEL TECH, 695 E MAIN STREET, STAMFORD CT 06901
Miguel Espinosa	director
George F Maccormack	director	PEPCO HOLDINGS, INC., 701 NINTH STREET, NW, SUITE 1300, WASHINGTON DC 20068
Thomas S Shaw	director	C/O CONECTIV, 800 KING ST PO BOX 231, WILMINGTON DE 19899