First Financial (First Financial) Predictability Rank

View and export this data going back to 1992. Start your Free Trial

What is First Financial 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.

First Financial 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

First Financial Predictability Rank Related Terms

Thank you for viewing the detailed overview of First Financial's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

First Financial (First Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » First Financial Corp (NAS:THFF) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

One First Financial Plaza, Terre Haute, IN, USA, 47807

Website

https://www.first-online.com

First Financial Corp operates as a financial holding company, which is engaged in the provision of financial services in the United States. The company offers a wide variety of financial services including commercial, mortgage, and consumer lending, lease financing, trust account services, depositor services, and insurance services, through its subsidiaries. Its primary source of revenue is derived from loans to customers and investment activities.

Executives

Susan M Jensen	director	3935 NORTH RANDALL STREET, TERRE HAUTE IN 47805
Pierson Paul Joseph Ii	director	1214 LADBROOKE DRIVE, EVANSVILLE IN 47725
James O Mcdonald	director	8305 N COAL CREEK PLACE, WEST TERRE HAUTE IN 47885
William Randolph Krieble	director	6158 BIG STONE DR., INDIANAPOLIS IN 46234
Thomas T Dinkel	director	100 HAMILTON DR, TERRE HAUTE IN 47803
William Curtis Brighton	director	INDIANAPOLIS MOTOR SPEEDWAY, 4790 WEST 16TH STREET, INDIANAPOLIS IN 46222
Tina Jane Maher	director	2000 BOLTON ROAD, WEST TERRE HAUTE IN 47885
Thomas Craig Martin	director	2609 STERLING AVENUE, BLOOMINGTON IN 47401
Richard Jerome Shagley	director	1924 S FRUITRIDGE AVENUE, TERRE HAUTE IN 47803
Blade Mark Jason Sr	director	3755 NORTH ANDERSON DRIVE, TERRE HAUTE IN 47803
Mark Allen Franklin	officer: Chief Lending Officer	2600 S ROBINS BOW, BLOOMINGTON IN 47401
Michael A Carty	director	322 S WASHINGTON ST, CLINTON IN 47842
Gregory L Gibson	director	12081 EAST RIO GRANDE, BRAZIL IN 47834
Norman L Lowery	director, officer: President & C.E.O.	93 ALLENDALE, TERRE HAUTE IN 47802
Norman D Lowery	officer: Chief Operations Officer	ONE FIRST FINANCIAL PLAZA, TERRE HAUTE X1 47807