PetMed Express (PetMed Express) Predictability Rank

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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.

PetMed Express 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

PetMed Express Predictability Rank Related Terms

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PetMed Express (PetMed Express) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » PetMed Express Inc (NAS:PETS) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

PQM:Germany PQM:Germany

Address

420 South Congress Avenue, Suite 100, Delray Beach, FL, USA, 33445

Website

https://www.petmeds.com

PetMed Express Inc along with its subsidiaries is a nationwide pet pharmacy. The company markets prescription and non-prescription pet medications, health products, and supplies for dogs and cats, direct to the consumer. The company generates its revenue by selling pet medications and pet supplies primarily to retail consumers.

Executives

Gian Fulgoni	director
Christine Chambers	officer: CFO	1501 1ST AVENUE SOUTH, STE. 600, SEATTLE WA 98134
Mathew N Hulett	director, officer: CEO & President	1621 NORTH KENT STREET, SUITE 1200, ARLINGTON VA 22209
Campbell Leslie C.g.	director	C/O COUPA SOFTWARE INC., 1855 S. GRANT STREET, SAN MATEO CA 94402
Diana G Purcel	director	C/O FAMOUS DVES OF AMERICA INC, 8091 WALLACE ROAD, EDEN PRAIRIE MN 55344
Moseley Mark Bradley Jr	other: Chief Technology Info Officer	420 SOUTH CONGRESS AVE., DELRAY BEACH FL 33445
Daniel Job Pingree	other: Chief Marketing Officer	420 SOUTH CONGRESS AVE., DELRAY BEACH FL 33445
Sandra Yvette Campos	director	4900 E DUBLIN GRANVILLE RD, COLUMBUS OH 43081
Jacqueline Paula Smith	other: Vice President of People	420 SOUTH CONGRESS AVE., DELRAY BEACH FL 33445
Carolyn Carden	other: VP of Product	420 SOUTH CONGRESS AVE., DELRAY BEACH FL 33445
Peter Cobb	director	DSW, INC., 810 DSW DRIVE, COLUMBUS OH 43219
Jodi Watson	director	420 SOUTH CONGRESS AVE., DELRAY BEACH FL 33445
Frank J Formica	director	1441 S.W. 29TH AVENUE, POMPANO BEACH FL 33069
Bruce S Rosenbloom	officer: Chief Financial Officer	6401 CONGRESS AVENUE, SUITE 250, BOCA RATON FL 33487
Menderes Akdag	director, officer: Chief Executive Officer	1441 S.W. 29TH AVENUE, POMPANO BEACH FL 33069