Chart Industries (Chart Industries) Predictability Rank

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What is Chart Industries 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.

Chart Industries 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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Chart Industries (Chart Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Chart Industries Inc (NYSE:GTLS) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

I3N:Germany

Address

2200 Airport Industrial Drive, Suite 100, Ball Ground, GA, USA, 30107

Website

https://www.chartindustries.com

Chart Industries provides a variety of cryogenic equipment for storage, distribution, and other processes within the industrial gas and liquefied natural gas (LNG) industries. It also provides natural gas processing solutions for the natural gas industry and specialty products that serve a variety of spaces, including hydrogen, biofuels, cannabis, and water treatment. The firm acquired Howden in a significant deal in early 2023, roughly doubling the size of the company.

Executives

Linda S Harty	director	MEDTRONIC PLC, 710 MEDTRONIC PARKWAY NE, LC-150, MINNEAPOLIS MN 55432
Andrew R Cichocki	director	C/O CHART INDUSTRIES, INC., 2200 AIRPORT INDUSTRIAL DRIVE, SUITE 100, BALL GROUND GA 30107
Stephanie Winn Everett	officer: Chief Accounting Officer	2200 AIRPORT INDUSTRIAL DRIVE SUITE 100, BALL GROUND GA 30107
Paul E Mahoney	director	C/O APERGY CORPORATION, 2445 TECHNOLOGY FOREST BLVD, BLD 4, FL 9, THE WOODLANDS TX 77381
Spencer S Stiles	director	2825 AIRVIEW BLVD, KALAMAZOO MI 49002
Gerald F Vinci	officer: VP & Chief Human Resources Ofc	3055 TORRINGTON DRIVE, BALL GROUND GA 30107
Jillian C. Evanko	officer: VP, CFO, CAO and Treasurer	1 INFINITY CORPORATE CENTRE DRIVE, GARFIELD HEIGHTS OH 44125
Roger A Strauch	director	125 GUILFORD ROAD, PIEDMONT CA 94611
David M. Sagehorn	director	2307 OREGON STREET, PO BOX 2566, OSHKOSH WI 54903-2566
Brian Patrick Bostrom	officer: Chief Technology Officer	2200 AIRPORT INDUSTRIAL DRIVE SUITE 100, BALL GROUND GA 30107
Joseph Robert Brinkman	officer: VP & Chief Financial Officer	3055 TORRINGTON DRIVE, BALL GROUND GA 30107
Ducote Douglas A Jr.	officer: Chief Technology Officer	3055 TORRINGTON DRIVE, BALL GROUND GA 30107
Paula Harris	director	3055 TORRINGTON DRIVE, BALL GROUND GA 30107
Joseph A Belling	officer: Chief Commercial Officer	3055 TORRINGTON DRIVE, BALL GROUND GA 30107
Robin M Catalano	officer: VP & Chief Accounting Officer	3055 TORRINGTON DRIVE, BALL GROUND GA 30107