What is Vocera Communications Predictability Rank?
1 (5)
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.
Vocera Communications 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
Also read:
Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety
Vocera Communications (Vocera Communications) Business Description
Traded in Other Exchanges
N/A
Address
525 Race Street, San Jose, CA, USA, 95126
Vocera Communications Inc provides secure, integrated, and intelligent communication and workflow solutions that empower mobile workers in healthcare, hospitality, energy, and other mission-critical mobile work environments in the United States and internationally. It has two operating segments: Product and Service. The company's communication solution could be integrated with other clinical systems, including electronic health records, nurse call systems, and patient monitoring, as well as to provide critical data, alerts, alarms, and clinical context that enable workflow. It also offers Vocera Communication and Workflow System, a software platform, which connects communication devices, including hands-free, wearable, voice-controlled communication badges and third-party mobile devices.
Executives
| Paul T Johnson |
other: EVP Sales and Services |
C/O VOCERA COMMUNICATIONS, INC. 525 RACE STREET SAN JOSE CA 95126 |
| Brent D. Lang |
director, officer: Chairman, President & CEO |
C/O VOCERA COMMUNICATIONS, INC., 525 RACE STREET, SAN JOSE CA 95126 |
| Mary Bridget Duffy |
officer: Chief Medical Officer |
C/O VOCERA COMMUNICATIONS, INC., 525 RACE STREET, SAN JOSE CA 95126 |
| Douglas Alan Carlen |
other: General Counsel |
110 RIO ROBLES SAN JOSE CA 95134 |
| John N Mcmullen |
director |
C/O EASTMAN KODAK COMPANY, 343 STATE STREET, ROCHESTER NY 14650 |
| Justin Spencer |
officer: EVP, Chief Financial Officer |
C/O VOCERA COMMUNICATIONS, INC. 525 RACE STREET SAN JOSE CA 95126 |
| Ronald A Paulus |
director |
QUOVADX, INC. 7600 E. ORCHARD RD., SUITE 300S GREENWOOD VILLAGE CO 80111 |
| Howard E Janzen |
director |
COOL PLANET 6400 S. FIDDLERS GREEN CIRCLE, STE 1300 GREENWOOD VILLAGE CO 80111 |
| Alexa King |
director |
C/O FIREEYE, INC. 1440 MCCARTHY BOULEVARD MILPITAS CA 95035 |
| Julie Iskow |
director |
2900 UNIVERSITY BOULEVARD, AMES X1 50010 |
| Michael Burkland |
director |
C/O FIVE9, INC., 4000 EXECUTIVE PARKWAY, SUITE 400, SAN RAMON CA 94583 |
| Bharat Sundaram |
director |
100 NORTH POINT CENTER EAST, SUITE 200, ALPHARETTA GA 30022 |
| Jeff Hillebrand |
director |
3061 ZANKER RD SAN JOSE CA 95134 |
| John B. Grotting |
director |
C/O VOCERA COMMUNICATIONS, INC. 525 RACE STREET SAN JOSE CA 95126 |
| Robert Zollars |
director |
3061 ZANKER RD, SAN JOSEC CA 95134 |
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