Omega Healthcare Investors (Omega Healthcare Investors) Predictability Rank

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What is Omega Healthcare Investors 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.

Omega Healthcare Investors 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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Omega Healthcare Investors (Omega Healthcare Investors) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Omega Healthcare Investors Inc (NYSE:OHI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

WX4:Germany WX4:Germany

Address

303 International Circle, Suite 200, Hunt Valley, MD, USA, 21030

Website

https://www.omegahealthcare.com

Omega Healthcare Investors Inc is a healthcare facility real estate investment trust that invests in the United States real estate markets. Omega's portfolio focuses on long-term healthcare facilities. The company maintains dual goals of increasing its returns to investors while also maintaining a high level of care for residents. Omega works to obtain contractual rent escalations under long-term leases, along with fixed-rate mortgage loans. The company considers merger and acquisition investment as a component of its operational growth strategy.

Executives

Gail D Makode	officer: Chief Legal Officer	ONE SOUND SHORE DR, SUITE 304, GREENWICH CT 06830
Kapila K Anand	director	C/O EXTENDED STAY AMERICA, INC., 11525 N. COMMUNITY HOUSE ROAD, SUITE 100, CHARLOTTE NC 28277
Neal Ballew	officer: Chief Accounting Officer	303 INTERNATIONAL CIRCLE, SUITE 200, HUNT VALLEY MD 21030
Burke W Whitman	director	13455 NOEL ROAD # 2000, DALLAS TX 75240
Lisa Egbuonu-davis	director	C/O OMEGA HEALTHCARE INVESTORS, INC., 303 INTERNATIONAL CIRCLE, SUITE 200, HUNT VALLEY MD 21030
Steven J Insoft	officer: Chief Corp Development Officer
Daniel J Booth	officer: Chief Operating Officer	9690 DEERECO ROAD, SUITE 100, TIMONIUM MD 21093
Robert O Stephenson	officer: Chief Financial Officer	C/O OMEGA HEALTHCARE INVESTORS, 9690 DEERECO ROAD, SUITE 100, TIMONIUM MD 21093
C Taylor Pickett	director, officer: Chief Executive Officer	C/O CORPORATE OFFICE PROPERTIES TRUST, 6711 COLUMBIA GATEWAY DRIVE, #300, COLUMBIA MD 21046
Kevin J Jacobs	director	7930 JONES BRANCH DRIVE, MCLEAN VA 22102
Michael Ritz	officer: Chief Accounting Officer	9690 DEERECO ROAD, SUITE 100, TIMONIUM MD 21131
Craig R Callen	director	7902 WESTPARK DR, C/O SUNRISE ASSISTED LIVING, MCLEAN VA 22102
Ben W Perks	director
Bernard J Korman	director	OMEGA HEALTHCARE INVESTORS INC, ANN ARBOR MI 48108
Craig M Bernfield	director	303 WEST MADISON STREET, SUITE 2400, CHICAGO IL 60606