Rigel Pharmaceuticals (Rigel Pharmaceuticals) Predictability Rank

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What is Rigel Pharmaceuticals 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.

Rigel Pharmaceuticals 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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Rigel Pharmaceuticals (Rigel Pharmaceuticals) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Rigel Pharmaceuticals Inc (NAS:RIGL) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

RI2A:Germany

Address

611 Gateway Boulevard, Suite 900, South San Francisco, CA, USA, 94080

Website

https://www.rigel.com

Rigel Pharmaceuticals Inc develops small-molecule drugs for autoimmune, cancer-related, and viral diseases. The firm's lead drug is an oral rheumatoid arthritis drug candidate that has been licensed to AstraZeneca. Astra has taken overall responsibility to develop and market the drug and will pay Rigel royalties and milestone payments. Its pipeline product includes TAVALISSE (fostamatinib disodium hexahydrate) tablets, the only oral spleen tyrosine kinase (SYK) inhibitor, Fostamatinib, R289, R552, R835, DS-3032, THF-beta Inhibitors, and AZD0449- Inhaled JAK Inhibitor.

Executives

Raul R Rodriguez	officer: Sr VP of Bus Dev and Com Ops	1180 VETERANS BOULEVARD, SOUTH SAN FRANCISCO CA 94080
David A Santos	officer: EVP, Chief Commercial Officer	RIGEL PHARMACEUTICALS, INC., 1180 VETERANS BLVD., SOUTH SAN FRANCISCO CA 94080
Wolfgang Dummer	officer: EVP & CMO	5491 OPTICAL CT., SAN JOSE CA 95138
Dean L Schorno	officer: EVP & Chief Financial Officer	301 PENOBSCOT DRIVE, REDWOOD CITY CA 94063
Raymond J. Furey	officer: EVP, GC & Corp Sec	1300 N. KELLOGG DRIVE, SUITE D, ANAHEIM CA 92807
Alison L. Hannah	director	12701 COMMONWEALTH DRIVE, SUITE 9, FORT MYERS FL 33913
Gary A Lyons	director	12790 EL CAMINO REAL, C/O NEUROCRINE BIOSCIENCES, SAN DIEGO CA 92130
Anthony Gregg Lapointe	director	PO BOX 83216, GAITHERSBURG MD 20883-3216
Brian L. Kotzin	director	RIGEL PHARMACEUTICALS, INC., 1180 VETERANS BOULEVARD, SOUTH SAN FRANCISCO CA 94060
Kamil Ali-jackson	director	C/O ACLARIS THERAPEUTICS, INC., 101 LINDENWOOD DRIVE, SUITE 400, MALVERN PA 19355
Jane Wasman	director	C/O ACORDA THERAPEUTICS, INC., 420 SAW MILL RIVER ROAD, ARDSLEY NY 10502
Nelson Cabatuan	officer: Principal Accounting Officer	RIGEL PHARMACEUTICALS, INC., 1180 VETERANS BLVD., SOUTH SAN FRANCISCO CA 94080
Anne-marie Duliege	officer: Chief Medical Officer	4001 MIRANDA AVENUE, PALO ALTO CA 94304
Mayer Eldon C. Iii	officer: EVP & Chief Commercial Officer	RIGEL PHARMACEUTICALS, INC., 1180 VETERANS BLVD., SOUTH SAN FRANCISCO CA 94080
Stacy Markel	officer: EVP Human Resources	RIGEL PHARMACEUTICALS, INC., 1180 VETERANS BLVD., SUITE 400, SOUTH SAN FRANCISCO CA 94080