LXP Industrial Trust (LXP Industrial Trust) Predictability Rank

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What is LXP Industrial Trust 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.

LXP Industrial Trust 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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LXP Industrial Trust (LXP Industrial Trust) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » LXP Industrial Trust (NYSE:LXP) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

LXPpC.PFD:USA

Address

One Penn Plaza, Suite 4015, New York, NY, USA, 10119-4015

Website

https://www.lxp.com

LXP Industrial Trust is a real estate investment trust principally involved in the ownership of equity and debt investments in single-tenant properties and land throughout the United States. Majority of the revenue is earned through rental revenue.

Executives

Derrick L Johnson	director	C/O LXP INDUSTRIAL TRUST, ONE PENN PLAZA, SUITE 4015, NEW YORK NY 10119-4015
Nancy Elizabeth Noe	director	ONE PENN PLAZA, SUITE 4015, NEW YORK NY 10119
Arun Gupta	director	C/O COLUMBIA CAPITAL, 201 NORTH UNION STREET, SUITE 300, ALEXANDRIA VA 22314
Nabil Andrawis	officer: EVP, Director of Taxation	C/O LXP INDUSTRIAL TRUST, ONE PENN PLAZA, SUITE 4015, NEW YORK NY 10119-4015
Richard Frary	director	C/O TALLWOOD ASSOCIATES INC., 14 EAST 60TH STREET, SUITE 1003, NEW YORK NY 10022
Jamie Handwerker	director	9 WEST 57TH STREET, SUITE 4920, NEW YORK NY 10019
Lara Sweeney Johnson	officer: EVP	C/O WINTHROP FINANCIAL ASSOCIATES, TWO JERICHO QUADRANGLE WING A SUITE 111, JERICHO NY 11753
Joseph Bonventre	officer: EVP, Gen Counsel & Secretary	ONE PENN PLAZA, SUITE 4015, NEW YORK NY 10119-4015
Mark Cherone	officer: Chief Accounting Officer	C/O LEXINGTON REALTY TRUST, ONE PENN PLAZA, SUITE 4015, NEW YORK NY 11743
James Dudley	officer: EVP & Director of Asset Mgmt.	C/O LEXINGTON REALTY TRUST, ONE PENN PLAZA, SUITE 4015, NEW YORK NY 10119-4015
Brendan P Mullinix	officer: EVP	LEXINGTON CORPORATE PROPERTIES TRUST, ONE PENN PLAZA, SUITE 4015, NEW YORK NY 10119-4015
Howard Stewart Roth	director	19 DEEPDALE DRIVE, GREAT NECK NY 11021
T Wilson Eglin	director, officer: CEO, President and COO
E Robert Roskind	director, officer: Chairman of the Board
Richard J Rouse	director, officer: Co-Vice Chairman & CIO