Hyatt Hotels (Hyatt Hotels) Predictability Rank

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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.

Hyatt Hotels 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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Hyatt Hotels (Hyatt Hotels) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Hyatt Hotels Corp (NYSE:H) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

1HTA:Germany 1HTA:Germany

Address

150 North Riverside Plaza, 8th Floor, Chicago, IL, USA, 60606

Website

https://www.hyatt.com

Hyatt is an operator of owned (4% of total rooms) and managed and franchise (96%) properties across around 20 upscale luxury brands, which includes vacation brands (Apple Leisure Group, Hyatt Ziva and Hyatt Zilara), the recently launched full-service lifestyle brand Hyatt Centric, the soft lifestyle brand Unbound, and the wellness brand Miraval. Hyatt acquired Two Roads in November 2018 and Apple Leisure Group in 2021. The regional exposure as a percentage of total rooms is 55% Americas, 19% Asia-Pacific, and 26% rest of world.

Executives

Jnp Parachute Mirror Trust L	other: See Remarks	104 SOUTH MICHIGAN AVENUE, SUITE 900, CHICAGO IL 60603-5906
Jnp Parachute Mirror Trust K	other: See Remarks	104 SOUTH MICHIGAN AVENUE, SUITE 900, CHICAGO IL 60603-5906
Jnp 2010-pg Trust	other: See Remarks	104 SOUTH MICHIGAN AVENUE, SUITE 900, CHICAGO IL 60603-5906
Joan Bottarini	officer: See Remarks	150 NORTH RIVERSIDE PLAZA, CHICAGO IL 60606
Peter Sears	officer: See Remarks	71 SOUTH WACKER DRIVE, 12TH FLOOR, CHICAGO IL 60606
David Udell	officer: See Remarks	71 SOUTH WACKER DRIVE, 12TH FLOOR, CHICAGO IL 60606
Malaika Myers	officer: See Remarks	71 SOUTH WACKER DRIVE, CHICAGO IL 60606
Mark R Vondrasek	officer: See Remarks	C/O AFFINION GROUP HOLDINGS, INC., 6 HIGH RIDGE PARK, STAMFORD CT 06905
Jspv 2010 Lasalle Mirror Trust #56	other: See Remarks	3555 TIMMONS LANE, SUITE 800, HOUSTON TX 77027
Tspv 2010 Lasalle Mirror Trust #60	other: See Remarks	3555 TIMMONS LANE, SUITE 800, HOUSTON TX 77027
Acps 2010 Lasalle Mirror Trust #19	other: See Remarks	3555 TIMMONS LANE, SUITE 800, HOUSTON TX 77027
Djps 2010 Lasalle Mirror Trust #46	other: See Remarks	3555 TIMMONS LANE, SUITE 800, HOUSTON TX 77027
Richard C Tuttle	director	71 SOUTH WACKER DRIVE, 12TH FLOOR, CHICAGO IL 60606
Michael A Rocca	director	C/O LIGAND PHARMACEUTICALS INCORPORATED, 10275 SCIENCE CENTER DRIVE, SAN DIEGO CA 92121
Susan D Kronick	director	C/O MACY'S, INC., 7 WEST SEVENTH STREET, CINCINNATI OH 45202