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Miller Industries (Miller Industries) Predictability Rank


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What is Miller Industries Predictability Rank?

2.5 (5)

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.

Miller 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Also read:

Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

Miller Industries Predictability Rank Related Terms

Thank you for viewing the detailed overview of Miller Industries's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Miller Industries (Miller Industries) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Miller Industries Inc (NYSE:MLR) » Definitions » Predictability Rank
Comparable Companies
PLOW SES HLLY SRI ECX SMP CYD HYLN LAZR CPS TSE:7315 TSE:6902 TSE:5108 XPAR:ML MBLY APTV XKRX:012330 TSX:MG SHSE:600660 XTER:CON
Traded in Other Exchanges
N/A
Address
8503 Hilltop Drive, Ooltewah, TN, USA, 37363
Website
https://www.millerind.com
Miller Industries Inc is engaged in the manufacturing of vehicle towing and recovery equipment. The company produces wreckers, car carriers, and trailer bodies under the Century, Vulcan, Challenger, Holmes, Champion, Chevron, Eagle, Titan, Jige, and Boniface brands. The products are sold primarily in North America, Canada, and Mexico through independent distributors.
Executives
Jill Sutton director 313 IRON HORSE WAY, PROVIDENCE RI 02908
Peter Lee Jackson director 8503 HILLTOP DRIVE, OOLTEWAH TN 37363
Javier A Reyes director 65 FALLING WATER LANE, MORGANTOWN WV 26508
Susan E Sweeney director 5605 CARNEGIE BLVD. SUITE 500, CHARLOTTE NC 28209
Jeffrey I Badgley officer: Co-CEO
Miller William G. Ii director, officer: CEO and President 8503 HILLTOP DRIVE, OOLTEWAH TN 37363
Josias W. Reyneke officer: Chief Information Officer 8503 HILLTOP DRIVE, OOLTEWAH TN 37363
Deborah L Whitmire director, officer: Chief Financial Officer 8503 HILLTOP DRIVE, OOLTEWAH TN 37363
Frank Madonia officer: Executive VP, Secretary & GC
Vincent J. Tiano officer: Vice President and CRO 8515 CAVANAUGH LANE, HIXSON TN 37343
Jamison Linden officer: Vice President and CMO 8503 HILLTOP DRIVE, OOLTEWAH TN 37363
Leigh Walton director 150 THIRD AVENUE SOUTH, SUITE 2800, NASHVILLE TN 37201
Ashford Theodore H. Iii director 909 STUART ROAD, WILMINGTON DE 19807
Richard H Roberts director C/O MILLER INDUSTRIES, INC., 8503 HILLTOP DRIVE, OOLTEWAH TN 37363
Chandler A Russell Iii director C/O KILPATRICK STOCKTON LLP, 110 PEACHTREE STREET SUITE 2800, ATLANTA GA 30309