BayCom (BayCom) Predictability Rank

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What is BayCom 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.

BayCom 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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BayCom (BayCom) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » BayCom Corp (NAS:BCML) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

500 Ygnacio Valley Road, Suite 200, Walnut Creek, CA, USA, 94596

Website

https://www.unitedbusinessbank.com

BayCom Corp is a bank holding company for United Business Bank. It provides a broad range of financial services to businesses and business owners as well as individuals through its full-service branches and loan production office. The company targets its services to small and medium-sized businesses, professional firms, real estate professionals, nonprofit businesses, labor unions, and related nonprofit entities and businesses and individual consumers. Its products and services include deposit products, personal accounts, loans, online banking, cash management, and business savings services.

Executives

Robert G. Laverne	director	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
George J. Guarini	director, officer: President and CEO	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Kendall Lloyd W. Jr.	director, other: Chairman of the Board	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Janet Lee King	officer: Senior EVP and COO	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Malcolm Flemming Hotchkiss	director	100 HEGENBERGER ROAD, OAKLAND CA 94621
Syvia L. Magid	director	C/O BAYCOM CORP, 500 YGNACIO VALLEY RD., SUITE 200, WALNUT CREEK CA 94596
Rick Pak	officer: EVP and Chief Lending Officer	C/O BAYCOM CORP, 500 YGNACIO VALLEY RD., SUITE 200, WALNUT CREEK CA 94596
Harpreet S. Chaudhary	director	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
David M. Spatz	director	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
James S. Camp	director	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Jon Rocco Davis	director	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Keary L. Colwell	officer: Senior EVP, CFO and Secretary	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
David John Funkhouser	officer: EVP and Chief Credit Officer	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Izabella Lin Zhu	officer: EVP and Chief Risk Officer	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596
Mary Therese Curley	officer: EVP, Director Labor Service	C/O BAYCOM CORP, 500 YGNACIO VALLEY ROAD, SUITE 200, WALNUT CREEK CA 94596