Enviri (Enviri) Predictability Rank

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What is Enviri 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.

Enviri 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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Enviri (Enviri) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Waste Management » Enviri Corp (NYSE:NVRI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

HA7:Germany

Address

100-120 North 18th Street, Two Logan Square, 17th Floor, Philadelphia, PA, USA, 19103

Website

https://www.enviri.com

Enviri Corp engages in providing a broad range of environmental services and related solutions. The company's current operations consist of three divisions: Harsco Environmental, Harsco Rail, and Clean Earth The company serves a diverse customer base by offering critical recycle and reuse solutions for their waste streams, enabling customers to address their complex environmental challenges.

Executives

Tom George Vadaketh	officer: SVP and CFO	1727 JOCKEYS WAY, YARDLEY PA 19067
Peter Francis Minan	officer: Chief Financial Officer	350 POPLAR CHURCH ROAD, CAMP HILL PA 17011
Rebecca Martinez O'mara	director	KADANT INC., 1 TECHNOLOGY PARK DRIVE, WESTFORD MA 01886
Timothy M Laurion	director	100 N. 18TH STREET, SUITE 1700, PHILADELPHIA PA 19103
Jeffrey A Beswick	officer: SVP & Grp. Pres., Clean Earth	933 FIRST AVENUE, SUITE 200, KING OF PRUSSIA PA 19406
Jennifer Ott Kozak	officer: Senior Vice President & CHRO	100-120 NORTH 18TH STREET, 17TH FLOOR, PHILADELPHIA PA 19103
Grasberger F Nicholas Iii	officer: Sr. V.P. & CFO	350 POPLAR CHURCH ROAD, CAMP HILL PA 17011
Anshooman Aga	officer: SVP and CFO	PO BOX 85587, SAN DIEGO CA 92186-5587
David Stanton	officer: SVP & Group Pres. Clean Earth	SOUTHWEST WATER COMPANY, 624 SOUTH GRAND AVE, SUITE 2900, LOS ANGELES CA 90017
Russell C. Hochman	officer: SVP, GC, CCO and Corp. Sec.	350 POPLAR CHURCH ROAD, CAMP HILL PA 17011
John S Quinn	director	C/O ALLIED WASTE INDUSTRIES, INC., 15880 N. GREENWAY-HAYDEN LOOP, SUITE 100, SCOTTSDALE AZ 85260
Wendy A. Livingston	officer: Senior Vice President and CHRO	350 POPLAR CHURCH ROAD, CAMP HILL PA 17011
Purvis Edgar M Jr	director	8000 W. FLORISSANT AVENUE, ST. LOUIS MO 63136
Tracey L. Mckenzie	officer: Vice President & CHRO	350 POPLAR CHURCH ROAD, CAMP HILL PA 17011
Phillip Widman	director	C/O TEREX CORP, 200 NYALA FARM ROAD, WESTPORT CT 06880