Veeco Instruments (Veeco Instruments) Predictability Rank

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What is Veeco Instruments 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.

Veeco Instruments 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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Veeco Instruments (Veeco Instruments) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Veeco Instruments Inc (NAS:VECO) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

VEO:Germany VEO:Germany

Address

Terminal Drive, Plainview, NY, USA, 11803

Website

https://www.veeco.com

Veeco Instruments Inc is a United States-based company that is principally engaged in designing, developing, and manufacturing thin-film process equipment, which is mainly used to produce electronic devices. The company's product categories by market consist of lighting, display, and power electronics; advanced packaging; MEMS and RF; scientific and industrial; and data storage. The lighting, display, and power electronics market accounts for over half of the total revenue. The company offers products and services in the United States; China; Europe, the Middle East, and Africa, or EMEA; and the rest of the world, with overseas markets contributing the majority of total revenue.

Executives

William John Miller	director, officer: CEO	C/O VEECO INSTRUMENTS INC., 1 TERMINAL DRIVE, PLAINVIEW NY 11803
John P Kiernan	officer: VP Finance & Corp. Controller	C/O VEECO INSTRUMENTS INC, TERMINAL DRIVE, PLAINVIEW NY 11803
Dennis Thomas St	director	C/O FORMFACTOR, INC., 7005 SOUTHFRONT ROAD, LIVERMORE CA 94551
Mary Jane Raymond	director	C/O COHERENT CORP., 375 SAXONBURG BLVD, SAXONBURG PA 16056
Susan Wilkerson	officer: SVP, Global Sales & Service	C/O VEECO INSTRUMENTS INC., PLAINVIEW NY 11803
Adrian Devasahayam	officer: SVP - Product Line Development	C/O VEECO INSTRUMENTS, 1 TERMINAL DRIVE, PLAINVIEW NY 11803
Lena Nicolaides	director	1250 RELIANCE WAY, FREMONT CA 94539
Peter J Simone	director	17075 THORNMINT COURT, SANDIGO CA 92127
Sujeet Chand	director	ROCKWELL AUTOMATION, INC., 1201 SOUTH SECOND STREET, MILWAUKEE WI 53204
Peter Porshnev	officer: SVP, Unified Engineering	C/O VEECO INSTRUMENTS INC., 1 TERMINAL DRIVE, PLAINVIEW NY 11803
Shubham Maheshwari	officer: EVP, CFO & COO	C/O VEECO INSTRUMENTS INC., 1 TERMINAL DRIVE, PLAINVIEW NY 11803
John R Peeler	officer: CEO	DYNATECH CORP, 3 NEW ENGLAND EXECUTIVE PARK, BURLINGTON MA 01803
Kathleen A Bayless	director	1251 MCKAY DRIVE, SAN JOSE CA 95131
Roger D Mcdaniel	director	C/O ENTEGRIS INC, 3500 LYMAN BOULEVARD, CHASKA MN 55318
Susan Wang	director	40919 ENCYCLOPEDIA CIRCLE, FREMONT CA 94538