Phoenix (Phoenix) Predictability Rank

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What is Phoenix Predictability Rank?

Not Rated

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.

Phoenix 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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Phoenix (Phoenix) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Insurance » Phoenix Companies Inc (NYSE:PNX) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

https://www.phoenixwm.phl.com

Phoenix Companies Inc is a Delaware corporation incorporated in 2000. It is a holding company. Its operating subsidiaries provide life insurance and annuity products through independent agents and financial advisors. Its main insurance company subsidiaries are Phoenix Life Insurance Company, domiciled in New York, and PHL Variable Insurance Company, domiciled in Connecticut. Its life insurance in force is permanent life insurance insuring one or more lives. Its annuity products include fixed and variable annuities with a variety of death benefit and guaranteed living benefit options. It operates two businesses segments: Life and Annuity and Saybrus Partners, Inc. The Life and Annuity segment includes individual life insurance and annuity products, including its closed block. Saybrus Partners, Inc provides dedicated life insurance and other consulting services to financial advisors in partner companies, as well as support for sales of Phoenix's product line through independent distribution organizations. Its products compete with similar products sold by other insurance companies and also with savings and investment products offered by banks, asset managers, and broker-dealers. Phoenix Life and PHLVIC are subject to regulation and supervision in each jurisdiction where it conducts business.

Executives

Arthur F Weinbach	director	1981 MARCUS AVENUE, LAKE SUCCESS NY 11042
John H Forsgren	director	DUKE ENERGY CORPORATION, 550 SOUTH TRYON STREET - DEC45A, CHARLOTTE NC 28202
Ann Maynard Gray	director
Westley V Thompson	director	THE PHOENIX COMPANIES, INC., ONE AMERICAN ROW, HARTFORD CT 06102
Sanford Jr Cloud	director	3820 STATE STREET, SANTA BARBARA CA 93105
James D Wehr	director, officer: President & CEO	3 BALA PLAZA EAST, SUITE 300, BALA CYNWYD PA 19004
Andrew J Mcmahon	director	C/O ALLIANCEBERNSTEIN L.P., 1345 AVENUE OF THE AMERICAS, NEW YORK NY 10105
Augustus K Oliver	director	C/O CORPORATE SECRETARY SCHOLASTIC CORP, 557 BROADWAY, NEW YORK NY 10012
Gordon J Davis	director	THE PHOENIX COMPANIES, INC., ONE AMERICAN ROW, HARTFORD CT 06102-5056
Thomas S Johnson	director	ALLEGHANY CORPORATION, 375 PARK AVENUE, SUITE 3201, NEW YORK NY 10152
Douglas C Miller	officer: Senior Vice President and Chie	ONE AMERICAN ROW, P.O. BOX 5056, HARTFORD CT 06052
Jean S Blackwell	director
Peter C Browning	director	GMS INC., 100 CRESCENT CENTRE PARKWAY, SUITE 800, TUCKER GA 30084
Jerry J Jasinowski	director	C/O HARSCO CORP, P O BOX 8888, CAMP HILL PA 17001-8888
Dona D Young	director, officer: Chairman, President & CEO	C/O FOOT LOCKER, INC., 112 WEST 34TH STREET, NEW YORK NY 10120