Sabra Health Care REIT (Sabra Health Care REIT) Predictability Rank

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What is Sabra Health Care REIT 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.

Sabra Health Care REIT 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

Sabra Health Care REIT Predictability Rank Related Terms

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Sabra Health Care REIT (Sabra Health Care REIT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Sabra Health Care REIT Inc (NAS:SBRA) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

SBRA:Mexico SBC:Germany

Address

18500 Von Karman Avenue, Suite 550, Irvine, CA, USA, 92612

Website

https://www.sabrahealth.com

Sabra Health Care REIT Inc is a healthcare facility real estate investment trust. The company operates one segment that owns and invests in healthcare real estate. All of the company's revenue is generated in the United States. Sabra's operations consist of nursing facilities, assisted living centers, and mental health facilities. The company considers merger and acquisition investment as a component of its operational growth strategy. Sabra works with existing operators to identify strategic development opportunities.

Executives

Michael Lourenco Costa	officer: Executive VP & CAO	18500 VON KARMAN AVENUE, SUITE 550, IRVINE CA 92612
Catherine Cusack	director	18500 VON KARMAN AVENUE, SUITE 550, IRVINE CA 92612
Andrews Harold W. Jr.	officer: Executive VP, CFO & Secretary	C/O SABRA HEALTH CARE REIT, INC., 18500 VON KARMAN, SUITE 550, IRVINE CA 92612
Michael J Foster	director	36 GROVE STREET, NEW CANAAN CT 06840
Ann Kono	director	18500 VON KARMAN AVENUE, SUITE 550, IRVINE CA 92612
Porter Clifton J Ii	director	18500 VON KARMAN AVENUE, SUITE 550, IRVINE CA 92612
Robert A. Ettl	director	C/O SABRA HEALTH CARE REIT, INC., 18500 VON KARMAN, SUITE 550, IRVINE CA 92612
Richard K Matros	director, officer: CEO and President
Raymond J Lewis	director	191 NORTH WACKER DRIVE, SUITE 1200, CHICAGO IL 60606
Lynne S Katzmann	director	18500 VON KARMAN AVENUE,SUITE 550, IRVINE CA 92612
Milton J Walters	director	C/O SABRA HEALTH CARE REIT, INC., 18500 VON KARMAN AVENUE, SUITE 550, IRVINE CA 92612
Ronald G Geary	director	10140 LINN STATION RD, LOUISVILLE KY 40223-3813
Jeffrey A. Malehorn	director	191 NORTH WACKER DRIVE, SUITE 1200, CHICAGO IL 60606
Talya Nevo-hacohen	officer: Executive VP, CIO & Treasurer	C/O SABRA HEALTH CARE REIT, INC., 18500 VON KARMAN, SUITE 550, IRVINE CA 92612
Craig A. Barbarosh	director	3525 PIEDMONT RD., NE, BUILDING 6, SUITE 700, ATLANTA GA 30305