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AMMJ (American Cannabis Co) Predictability Rank


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What is American Cannabis Co Predictability Rank?

1 (5)

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.


American Cannabis Co 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

American Cannabis Co Predictability Rank Related Terms

Thank you for viewing the detailed overview of American Cannabis Co's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.


American Cannabis Co Business Description

Traded in Other Exchanges
N/A
Address
1004 Tejon Street, Colorado Springs, CO, USA, 80903
American Cannabis Co Inc is engaged in the cannabis industry that features end-to-end solutions for businesses operating in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been decriminalized for medical use and/or legalized for recreational use. It provides advisory and consulting services specific to this industry, designs industry-specific products and facilities, and manages a strategic group partnership that offers both exclusive and non-exclusive customer products commonly used in the industry. It is a licensed operator of two medical cannabis dispensaries and a cannabis cultivation facility in Colorado Springs, CO.
Executives
Tyler A Schloesser officer: Chief Operations Officer 9874 WEST LA SALLE PLACE, LAKEWOOD CO 80227
Ellis Lamar Smith director, 10 percent owner, officer: Cheif Development Officer 2590 WALNUT ST, DENVER CO 80205
Hollister Corey James Ariel director, 10 percent owner, officer: Chief Executive Officer 5316 RUSTIC AVE, FIRESTONE CO 80504
David Michael Godfrey officer: Principal Accounting Officer 5690 LOGAN STREET, DENVER CO 80237
Jon Workman officer: Vice President 2600 RAY DEAN ROAD, TUCKER AR 72168
Michael Schwanbeck officer: Chief Financial Officer 555 E. 19TH AVENUE, #2421, DENVER CO 80203
Tad M Mailander director 4811 49TH STREET, SAN DIEGO CA 92115
Terry Lynn Buffalo director, officer: CEO 3063 BRIGHTON BLVD, #918, DENVER CO 80216
Jesus Quintero officer: Former CFO 16860 SOUTHWEST 1ST STREET, PEMBROKE PINES FL 33027
Michael A Novielli director, 10 percent owner 100 MILL PLAIN ROAD, 3RD FLOOR, DANBURY CT 06811
Anthony J Baroud director, 10 percent owner, officer: Chief Technology Officer 211 EAST CIRCLE AVE, PROSPECT HEIGHTS IL 60070
Themistocles Psomiadis director, officer: Chief Executive Officer 1420 MIDTOWN AVE, APT 407, MOUNT PLEASANT SC 29464
Villas Boas Andrea Bezerra Arruda 10 percent owner ALAMEDA UAPIXANA, 278, SAO PAULO D5 04085-030
Douglas Leighton director 312 STUART ST, BOSTON MA 02116
Donald Brucker director, 10 percent owner, officer: VP Research & Development 110 WEST C STREET, SUITE 1300, SAN DIEGO CA 92101

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