What is Aptose Biosciences Predictability Rank?
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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.
Aptose Biosciences 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
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
Aptose Biosciences Business Description
Traded in Other Exchanges
Address
66 Wellington Street West, Suite 5300, TD Bank Tower Box 48, Toronto, ON, CAN, M5K 1E6
Aptose Biosciences Inc is a clinical-stage biotechnology company committed to discovering and developing personalized therapies addressing unmet medical needs in oncology. The company's small molecule cancer therapeutics pipeline includes products designed to provide single agent efficacy and to enhance the efficacy of other anti-cancer therapies and regimens without overlapping toxicities.
Executives
| William G. Rice |
director, officer: Chair, President & CEO |
C/O APTOSE BIOSCIENCES INC., 251 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
| Bernd R. Seizinger |
director |
535 BOYLSTON STREET, BOSTON MA 02116 |
| Fletcher Payne |
officer: SR VP & Chief Fin. Officer |
260 LITTLEFIELD AVENUE, SOUTH SAN FRANCISCO CA 94080 |
| Philippe Ledru |
officer: Chief Commercial Officer |
C/O APTOSE BIOSCIENCES INC., 2511 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
| Denis R Burger |
director |
CYTODYN INC., 1111 MAIN STREET, SUITE 660, VANCOUVER WA 98660 |
| Erich Platzer |
director |
|
| Rafael Bejar |
officer: Chief Medical Officer |
C/O APTOSE BIOSCIENCES INC., 251 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
| Wilson Donald R. Jr. |
10 percent owner |
540 W. MADISON ST., SUITE 2500, CHICAGO IL 60661 |
| Drw Holdings, Llc |
10 percent owner |
540 W. MADISON ST., SUITE 2500, CHICAGO IL 60661 |
| Drw Commodities, Llc |
10 percent owner |
540 W. MADISON ST., SUITE 2500, CHICAGO IL 60661 |
| Warren Whitehead |
director |
C/O APTOSE BIOSCIENCES INC., 251 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
| Gregory K. Chow |
officer: Senior VP & CFO |
C/O APTOSE BIOSCIENCES INC., 251 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
| Jotin Marango |
officer: Senior VP, Chief Bus. Officer |
C/O APTOSE BIOSCIENCES INC., 251 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
| Caroline M Loewy |
director |
300 ELLIOTT AVE WEST, SUITE 500, SEATTLE WA 98119-4114 |
| Mark D. Vincent |
director |
C/O APTOSE BIOSCIENCES INC., 251 CONSUMERS ROAD, SUITE 1105, TORONTO A6 M2J 4R3 |
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