GRCE (Grace Therapeutics) Predictability Rank

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What is Grace Therapeutics 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.

Grace Therapeutics 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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Grace Therapeutics Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Grace Therapeutics Inc (NAS:GRCE) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

103 Carnegie Center, Suite 300, Princeton, NJ, USA, 08540

Website

https://www.acastipharma.com

Grace Therapeutics Inc is a late-stage specialty pharma company with drug delivery technologies and drug candidates addressing rare and orphan diseases. The company's lead drug candidate, GTx-104, is a novel injectable formulation of nimodipine for the treatment of a rare disease, aneurysmal subarachnoid hemorrhage.

Executives

George Kottayil	director	49 OLD BEAR BROOK ROAD, PRINCETON NJ 08540
A Brian Davis	director	C/O VERRICA PHARMACEUTICALS INC., 10 NORTH HIGH STREET, SUITE 200, WEST CHESTER PA 19380
Edward Neugeboren	director	282 NEW NORWALK ROAD, NEW CANAAN CT 06840
Vimal Kavuru	director	11 MAACKA DRIVE, HOLMDEL NJ 07733
Donald Olds	director	545 PROMENADE DU CENTROPOLIS, SUITE 100, LAVAL A8 H7T 0A3
Amresh Kumar	officer: VP Program Management	3009, BOUL. DE LA CONCORDE EAST, SUITE 102, LAVAL A8 H7E 2B5
Carrie D'andrea	officer: VP Clinical Operations	3009, BOUL. DE LA CONCORDE EAST, SUITE 102, LAVAL A8 H7E 2B5
Prashant Kohli	officer: Chief Executive Officer	206 CAMBRIDGE LANE, NEWTOWN PA 13940
R. Loch Macdonald	officer: Chief Medical Officer	200 CONNELL DRIVE, SUITE 1600, BERKELEY HEIGHTS NJ 07922
Michael Derby	director	303 SOUTH BROADWAY, SUITE 125, TARRYTOWN NY 10591
William A Haseltine	director
Rajitha Grace 2018 Irrevocable Trust	10 percent owner	40 BEY LEA ROAD, SUITE C 202, TOMS RIVER NJ 08753
Swami Sambamurty Iyer	10 percent owner	20 TULSA COURT, MONMOUTH JUNCTION NJ 08852
Brian D. Ford	officer: CHIEF FINANCIAL OFFICER	3009, BOUL. DE LA CONCORDE EAST, SUITE 102, LAVAL A8 H7E 2B5
John Canan	director	C/O REV GROUP, INC., 111 EAST KILBOURN AVENUE, SUITE 2600, MILWAUKEE WI 53202