Inter Parfums (Inter Parfums) Predictability Rank

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What is Inter Parfums 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.

Inter Parfums 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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Inter Parfums (Inter Parfums) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Inter Parfums Inc (NAS:IPAR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

JF1:Germany

Address

551 Fifth Avenue, New York, NY, USA, 10176

Website

https://www.interparfumsinc.com

Inter Parfums Inc operates in the fragrance business and manufactures, markets, and distributes fragrances and fragrance related products. It sells its product under the brand names called JIMMY CHOO, bebe, Paul Smith, Abercrombie and Fitch, COACH, and others. The company operates in two operating segments namely European based operations, and United-States operations. The company sells its products to department stores, perfumeries, specialty stores, and domestic and international wholesalers and distributors.

Executives

Philippe Santi	officer: Dir. of Finance	INTER PARFUMS S A, 4 ROND POINT DES CHAMPS ELYSEES, PARIS I0 99999
Jean Madar	director, 10 percent owner, officer: CEO	JEAN PHILIPPE FRAGRANCES INC, 551 FIFTH AVE 15TH FLOOR, NEW YORK NY 10176
Gerard Kappauf	director	JUMEIRAH 1, 30TH C STREET, VILLA 76, DUBAI C0 500001
Veronique Gabai-pinsky	director	C-O VERA WANG GROUP, 15 EAST 26TH STREET, NEW YORK NY 10010
Gilbert Harrison	director	HARRISON GROUP, 745 FIFTH AVENUE, SUITE 514, NEW YORK NY 10151
Pelayo Frederic Garcia	officer: Dir ExportSales InterParfumsSA
Russell Greenberg	director, officer: Ex. VP and CFO	INTER PARFUMS INC, 551 FIFTH AVE 15TH FLR, NEW YORK NY 10176
Philippe Benacin	director, 10 percent owner, officer: President	C/O INTER PARFUMS INC, 551 FIFTH AVE, 5TH FLOOR, NEW YORK NY 10176
Michel D. Atwood	director, officer: Chief Financial Officer	1113 YORK AVENUE, NEW YORK NY 10065
Francois Heilbronn	director	M M FRIEDRICH HEILBRONN & FISZER, 24 AVE MATIGNON, PARIS I0 99999
Torres Robert Bensoussan	director	48 BOULEVARD RASPAIL, PARIS I0 99999
Patrick Choel	director	UNIVERSITE-82, 7 RUE DE TALLEYRAND, PARIS I0 75007
Henry B. Clarke	officer: President Specialty Retail Div	INTER PARFUMS, INC., 551 FIFTH AVENUE, NEW YORK NY 10176
Michel Dyens	director	MICHEL DYENS & CO, 17 AVENUE MONTAIGNE, PARIS I0 75008
Jean Levy	director	CHEZ AXCESS GROUPE, 8 RUE DE BERRI, PARIS I0 99999