Climb Global Solutions (Climb Global Solutions) Predictability Rank

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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.

Climb Global Solutions 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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Climb Global Solutions (Climb Global Solutions) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Climb Global Solutions Inc (NAS:CLMB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

4 Industrial Way West, Suite 300, Eatontown, NJ, USA, 07724

Website

https://www.waysidetechnology.com

Climb Global Solutions Inc is a cloud-based, value-added IT distribution and solutions company specializing in emerging technologies. It operates across the USA, Canada, and Europe through multiple business units, including Climb Channel Solutions, Sigma, Grey Matter, Interwork, and TechXtend. The Company is organized into two reportable operating segments. The Distribution segment distributes technical software to corporate resellers, value added resellers (VARs), consultants and systems integrators under the name Climb Channel Solutions. The Solutions segment is a cloud solutions provider and value-added reseller of software, hardware and services to customers under the names Grey Matter.

Executives

Timothy Popovich	officer: COO & President	715 OCEAN GATE AVE, PO BOX 523, OCEAN GATE NJ 08740
Andrew S Bryant	director	ARROW ELECTRONICS, INC., 9201 EAST DRY CREEK ROAD, CENTENNIAL CO 80112
Andrew E Clark	officer: Chief Financial Officer	6011 UNIVERSITY BLVD., SUITE 370, ELLICOTT CITY MD 21043
Geygan Jeffrey Richart Geygan	director	1433 N WATER STREET, SUITE 549, MILWAUKEE WI 53202
John R Mccarthy	director	4 INDUSTRIAL WAY WEST, SUITE 300, EATONTOWN NJ 07724
Kimberly Boren	director	18872 MACARTHUR BLVD., SUITE 200, IRVINE CA 92612
Gerri Gold	director	4 INDUSTRIAL WAY WEST, SUITE 300, EATONTOWN NJ 07724
Dale Richard Foster	officer: Executive VP	10900 PUMP HOUSE ROAD, ANNAPOLIS JUNCTION MD 20701
Charles Edward Bass	officer: VP New Business	12427 BAYHILL DRIVE, CARMEL IN 46033
Vito Legrottaglie	officer: VP Management Info Systems
Greg Scorziello	director	4 INDUSTRIAL WAY WEST, SUITE 300, EATONTOWN NJ 07724
Matthew M Sullivan	officer: CAO	4 INDUSTRIAL WAY WEST, SUITE 300, EATONTOWN NJ 07724
Carol Dibattiste	director	1155 W FREDERICK SMALL RD, JUPITER FL 33458
Diana Kurty	director	C/O WAYSIDE TECHNOLOGY GROUP, 11, SHREWSBURY NJ 07702
Michael Faith	director, officer: Director	ONE DANIEL BURNHAM CT., #400C, SAN FRANCISCO CA 94109