Tompkins Financial (Tompkins Financial) Predictability Rank

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What is Tompkins 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.

Tompkins 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

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Tompkins Financial (Tompkins Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Tompkins Financial Corp (AMEX:TMP) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

8J0:Germany

Address

118 East Seneca Street, P.O Box 460, Ithaca, NY, USA, 14851

Website

https://www.tompkinsfinancial.com

Tompkins Financial Corp is a Financial Holding Company. It has three business segments, consisting of banking, insurance and wealth management. It offers various products and services, including commercial and consumer banking, leasing, trust and investment management, financial planning and wealth management, and insurance. Insurance is comprised of property and casualty insurance services and employee benefit consulting. Wealth management activities include the results of the company's trust, financial planning, and wealth management services.

Executives

Charles J Guarino	officer: SVP Chief Bank Operations Off.	220 LIBERTY STREET, WARSAW NY 14569
David Kershaw	officer: SVP, PAO	PO BOX 460, ITHACA NY 14851
Matthew D Tomazin	officer: EVP, CFO & Treasurer	PO BOX 460, ITHACA NY 14851
Johanna B Anderson	officer: Officer: EVP, Pres., TCB CNY	PO BOX 460, ITHACA NY 14851
Alfred J Weber	director	5 FOXGLOVE LANE, READING PA 19606
John D Mcclurg	director	PO BOX 460, ITHACA NY 14851
Nancy E. Catarisano	director	27 FAIRPORT DRIVE, FAIRPORT NY 14450
Angela B Lee	director	PO BOX 460, ITHACA NY 14851
Diane D Torcello	officer: EVP & President, Tompkins WNY	PO BOX 460, ITHACA NY 14851
Gregory J Hartz	officer: Executive Vice Pres.	C/O TOMPKINS TRUSTCO, INC., P.O. BOX 460, ITHACA NY 14851
Francis M Fetsko	officer: EVP, CFO, Treasurer	C/O TOMKINS TRUSTCO, INC., PO BOX #460, ITHACA NY 14851
Ita M Rahily	director	P.O. BOX 460, ITHACA NY 14851
Ginger G Kunkel	officer: President TCB Pennsylvania	389 COAL MOUNTAIN ROAD, ORWIGSBURG PA 17961
Scott L Gruber	officer: EVP, Pres & CEO, VIST Bank	1240 BROADCASTING RD., WYOMISSING PA 19610
John M Mckenna	officer: EVP, Tompkins Bank of Castile	P.O. BOX 460, ITHACA NY 14851