United Airlines Holdings (United Airlines Holdings) Predictability Rank

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What is United Airlines Holdings 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.

United Airlines Holdings 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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United Airlines Holdings (United Airlines Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » United Airlines Holdings Inc (NAS:UAL) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

UAL:Mexico 1UAL:Italy UAL1:Germany UAL1:Germany UAL1:Germany U1AL34:Brazil

Address

233 South Wacker Drive, Chicago, IL, USA, 60606

Website

https://www.united.com

United Airlines is a major U.S. network carrier with hubs in San Francisco, Chicago, Houston, Denver, Los Angeles, New York/Newark, and Washington, D.C. United operates a hub-and-spoke system that is more focused on international and long-haul travel than its large U.S. peers.

Executives

Kennedy James A C	director	T ROWE PRICE GROUP INC, 100 E PRATT ST, BALTIMORE MD 21202
Michael D. Leskinen	officer: EVP & Chief Financial Officer	233 S. WACKER DRIVE, WHQLD, CHICAGO IL 60606
Gerald Laderman	officer: EVP and CFO	233 S. WACKER DRIVE 11TH FL WHQLD, CHICAGO IL 60606
Gregory L Hart	officer: EVP & Chief Growth Officer	233 SOUTH WACKER DRIVE, 11TH FLOOR HDQLD, CHICAGO IL 60606
Edward M Philip	director	C/O HASBRO, INC., 1011 NEWPORT AVENUE, PAWTUCKET RI 02861
Carolyn Corvi	director	233 SOUTH WACKER DRIVE 11TH FL WHQLD, CHICAGO IL 60606
Barney Harford	director	C/O ORBITZ WORLDWIDE, INC., 500 W. MADISON STREET, SUITE 1000, CHICAGO IL 60661
Michele J Hooper	director	C/O PPG INDUSTRIES, INC., ONE PPG PLACE, PITTSBURGH PA 15272
Edward Shapiro	director	275 GROVE STREET, NEWTON MA 02466
Chris Kenny	officer: Vice President & Controller	233 S. WACKER DRIVE 11TH FL WHQLD, CHICAGO IL 60606
Andrew P Nocella	officer: EVP & Chief Commercial Officer	233 S. WACKER DR. 11TH FL WHQLD, CHICAGO IL 60606
Torbjorn J Enqvist	officer: EVP & Chief Operations Officer	233 S. WACKER DRIVE, 11TH FL WHQLD, CHICAGO IL 60606
Linda P Jojo	officer: EVP & Chief Customer Officer	233 S. WACKER DRIVE 11TH FL WHQLD, CHICAGO IL 60606
Kate Gebo	officer: EVP HR and Labor Relations	233 SOUTH WACKER DRIVE, 11TH FL - WHQLD, CHICAGO IL 60606
Brett J Hart	officer: President	233 S. WACKER DRIVE, 11TH FL - WHQLD, CHICAGO IL 60606