AdvancePierre Foods Holdings (AdvancePierre Foods Holdings) Predictability Rank

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What is AdvancePierre Foods Holdings 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.

AdvancePierre Foods Holdings 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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AdvancePierre Foods Holdings (AdvancePierre Foods Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » AdvancePierre Foods Holdings Inc (NYSE:APFH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.advancepierre.com

AdvancePierre Foods Holdings Inc was incorporated in Delaware on December 5, 2008 as Pierre Foods Holding Corporation and changed its name to AdvancePierre Foods Holdings, Inc., on March 16, 2016. The Company is a producer and distributor of value-added, ready-to-eat sandwiches, sandwich components and other entrÃ©es and snacks. It markets and distributes multiple product categories including ready-to-eat sandwiches, such as breakfast sandwiches, PB&J sandwiches and hamburgers; sandwich components, such as fully-cooked hamburger and chicken patties and Philly steaks; and other entrÃ©es and snacks, such as country fried steak, stuffed entrÃ©es, chicken tenders and cinnamon dough bites. The Company sells its value-added products to the foodservice, retail and convenience channels, as well as in the industrial channel. It operates in four segments Foodservice, Retail, Convenience and Industrial. Its Foodservice customers include national and regional distributors, who sells Company's products to end-customers including restaurant operators, schools, U.S. military and grocery deli counters. Its Retail segment serves an array of retail customers including national and regional grocery chains, major warehouse club stores, mass retailers and dollar stores. The Convenience segment represents outlet for ready-to-eat sandwiches and includes sales to vending providers. Industrial segment consists of sales to other food producers under short-term co-manufacturing agreements. Its competitors include American Food Group, CTI, Allied Specialty Foods, Devault Foods, Lopez Foods and JTM Food Group.

Executives

Stephen A Kaplan	director	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Oaktree Fund Gp I, L.p.	10 percent owner	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Oaktree Capital Group Holdings Gp, Llc	10 percent owner	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Oaktree Capital Group, Llc	10 percent owner	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Oaktree Capital I, L.p.	10 percent owner	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Ocm Holdings I, Llc	10 percent owner	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Oaktree Holdings, Llc	10 percent owner	333 SOUTH GRAND AVENUE, 28TH FLOOR, LOS ANGELES CA 90071
Oaktree Capital Management Lp	10 percent owner	333 S GRAND AVE 28TH FL, LOS ANGELES CA 90071
Gary L Perlin	director	1680 CAPITAL ONE DRIVE, C/O CAPITAL ONE FINANCIAL CORP, MCLEAN VA 22102
Celeste A. Clark	director	C/O ADVANCEPIERRE FOODS HOLDINGS, INC., 9987 CARVER ROAD, BLUE ASH OH 45242
Richard Dean Hollis	director, other: Chairman of the Board	3603 HAVEN AVENUE, SUITE E, MENLO PARK CA 94025
Michael B Sims	officer: CFO	250 EAST FIFTH STREET, CINCINNATI OH 45202
Christopher D Sliva	director, officer: CEO & President	2515 MCKINNEY AVENUE, SUITE 1200, DALLAS TX 75201
Simons John Nelson Jr	director, officer: CEO	7931 EAGLE RANCH ROAD, FT. COLLINS CO 80528
Margaret M Cannella	director	C/O SCHRODERS, 875 THIRD AVENUE, 22ND FLOOR, NEW YORK NY 10022

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