The GuruFocus business predictability rating ranks companies on a five-star scale, defining the more predictable companies as businesses whose revenue and Ebitda, both on a per share basis, have been growing steadily and who have produced a strong long-term performance of their stock prices.
Thus, an investment strategy based on a "buy and hold" approach could be highly successful with stocks that have a high GuruFocus business predictability rating, in my opinion. Value investors may want to consider the following three companies, as they have high business predictability ratings from GuruFocus.
Comcast Corp
The first company that holds the criteria is Comcast Corp (CMCSA, Financial), a Philadelphia, Pennsylvania-based global operator of media and technology.
Comcast Corp's business has a 4.5-star rating out of a total of 5 stars for its predictability. The company saw the revenue per share grow by 11.70% and the Ebitda per share grow by 8.70% on average every year over the past 10 years.
The share price ($56.88 at close on Friday) represents a five-fold increase from 10 years ago. The stock has a market capitalization of $261.32 billion.
GuruFocus assigned a financial strength rating of 4 out of 10 and a profitability rating of 8 out of 10 to the company.
The price-earnings ratio is 22.48 versus the industry median of 22.33, the enterprise-value-to-Ebitda ratio is 10.61 versus the industry median of 11.73 and the price-sales ratio is 2.53 versus the industry median of 1.82.
As of June, Wall Street sell-side analysts recommend a median rating of buy for the stock with an average target price of $64.32 per share.
Salesforce.com Inc
The second company that meets the criteria is Salesforce.com Inc (CRM, Financial), a San Francisco-based developer of customer relationship management-focused cloud computing solutions for businesses worldwide.
Salesforce.com Inc's business has a 4.5-star business predictability rank out of a total of 5 stars. The company saw the revenue per share grow by 21.80% and the Ebitda per share grow by 35.70% on average every year over the past 10 years.
The share price ($240.31 at close on Friday) represents a more than 6.5-fold increase from 10 years ago. The stock has a market capitalization of $222.53 billion.
GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability rating of 6 out of 10 to the company.
The price-earnings ratio is 50.27 versus the industry median of 32.28, the enterprise-value-to-Ebitda ratio is 55.9 versus the industry median of 18.66 and the price-sales ratio is 10.06 versus the industry median of 3.64.
As of June, Wall Street sell-side analysts recommend a buy recommendation rating for this stock and have established an average target price of about $278.88 per share.
Broadcom Inc
The third company that matches the criteria is Broadcom Inc (AVGO, Financial), a San Jose, California-based manufacturer and distributor of various semiconductors worldwide.
Broadcom Inc's business has a 5-star predictability rating. The company saw the revenue per share grow by 25.6% and the Ebitda per share grow by 31.40% on average every year over the past 10 years.
The current share price ($470.70 as of Friday) has increased almost 14-fold over the past 10 years, determining a market capitalization of $192.19 billion.
GuruFocus assigned a financial strength rating of 4 out of 10 and a profitability rating of 9 out of 10 to the company.
The price-earnings ratio is 43.87 versus the industry median of 29.1, the enterprise-value-to-Ebitda ratio is 17.16 in line with the industry median and the price-sales ratio is 7.84 versus the industry median of 2.9.
As of June, Wall Street sell-side analysts recommend a median rating of overweight for the stock with an average target price of $531.39 per share.
Disclosure: I have no position in any security mentioned.
