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ADRT (Ault Disruptive Technologies) Predictability Rank


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What is Ault Disruptive Technologies Predictability Rank?

Not Rated

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.

Ault Disruptive Technologies 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Ault Disruptive Technologies Predictability Rank Related Terms

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Ault Disruptive Technologies Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » Ault Disruptive Technologies Corp (AMEX:ADRT) » Definitions » Predictability Rank
Comparable Companies
CPBI JGGC GSD FATP OTEC WAVS ELLH ACBA MCAF DKDCA PBAJ SVMB SCRM CVII AAC GHIX ALCC AACT DWAC SAGA
Traded in Other Exchanges
N/A
Address
11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV, USA, 89141
Website
https://www.aultdisruptive.com
Ault Disruptive Technologies Corp is a blank check company.
Executives
Ault Milton C Iii director 11411 SOUTHERN HIGHLANDS PARKWAY, SUITE 240, LAS VEGAS NV 89141
Robert O Smith director DIGITAL POWER CORPORATION, 41920 CHRISTY STREET, FREMONT CA 94538
William B. Horne director, officer: Chief Executive Officer C/O AULT ALLIANCE, INC., 940 SOUTH COAST DRIVE, SUITE 200, COSTA MESA CA 92626
Jeffrey Allen Bentz director 107 E BONITA WAY, TEMPE AZ 85281
Henry Carl Nisser director, officer: President and General Counsel 100 PARK AVENUE, SUITE 1658A, NEW YORK NY 10017
Kenneth S Cragun officer: Chief Financial Officer 3775 CHIPPEWA CIRCLE, CORONA CA 92881
David J Katzoff officer: Vice President - Finance 201 SHIPYARD WAY, NEWPORT BEACH CA 92663
Mark Gustafson director 10691 ROSECROFT CRESCENT, RICHMOND A1 V7A 2H9
Ault Disruptive Technologies Company, Llc 10 percent owner 11411 SOUTHERN HIGHLANDS PKWY, SUITE 240, LAS VEGAS NV 89141
Mark Christian Nelson director C/O AULT DISRUPTIVE TECHNOLOGIES CORP, 11411 SOUTHERN HIGHLANDS, PKWY 240, LAS VEGAS NV 89141