CJJD (China Jo-Jo Drugstores) Predictability Rank

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What is China Jo-Jo Drugstores 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.

China Jo-Jo Drugstores 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

China Jo-Jo Drugstores Predictability Rank Related Terms

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China Jo-Jo Drugstores Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » China Jo-Jo Drugstores Inc (NAS:CJJD) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

Renxin Yaju Building, Zhejiang Province, 5 Floor, 4 Gong Shu District, Hangzhou, CHN, 310008

Website

http://www.jiuzhou360.com

China Jo-Jo Drugstores Inc is a retailer and distributor of pharmaceutical products. The company's operating segments include Retail drugstores, Online Pharmacy, and Drug wholesale. Retail drugstores segment sells prescription and over-the-counter medicines, TCM, dietary supplements, medical devices, and sundry items to retail customers. The online pharmacy segment sells drugs through third-party platforms such as Alibaba's Tmall, JD.com, and Amazon.com. It generates maximum revenue from the Retail drugstores segment.

Executives

Wei Hu	officer: Chief Operating Officer	HAI WAI HAI TONGXIN MANSION FLOOR 6 GONG SHU DISTRICT HANGZHOU CITY F4 310008
Pingfan Wu	director	HAI WAI HAI TONGXIN MANSION FLOOR 6 GONG SHU DISTRICT HANGZHOU CITY F4 310008
Jiangliang He	director	HAI WAI HAI TONGXIN MANSION FLOOR 6 GONG SHU DISTRICT HANGZHOU CITY NY 310008
Liu Yan	officer: Secretary	HAI WAI HAI TONGXIN MANSION FLOOR 6 GONG SHU DISTRICT HANGZHOU CITY, ZHEJIANG PROVIN F4 310008
Lei Liu	director, 10 percent owner, officer: CEO, Chairman of the Board	ROOM 507-513, 5TH FLOOR,A BUILDING MEIDU PLAZA, GONGSHU DISTRICT HANGZHOU F4 310011
Ming Zhao	director, 10 percent owner, officer: Chief Financial Officer	1ST FLOOR, YUZHENG PLAZA, NO. 76, YUHUANGSHAN ROAD, HANGZHOU, ZHEJIANG PROVINCE F4 00000
Caroline Wang	director	HAI WAI HAI TONGXIN MANSION FLOOR 6 GONG SHU DISTRICT HANGZHOU CITY F4 310008
Hillhouse Investment Management, Ltd.	10 percent owner	OFFICE #122, WINDWARD 3 BUILDING, REGATTA OFFICE PARK, WEST BAY ROAD, GRAND CAYMAN E9 KY1-9006
Li Lei	director, 10 percent owner, officer: CEO, Chairman of the Board	511 NE 94TH STREET MIAMI SHORES FL 33138
Li Qi	director, 10 percent owner, officer: Secretary	ROOM 507-513, 5TH FLOOR, A BUILDING MEIDU PLAZA, GONGSHU DISTRICT HANGZHOU F4 310011
Zhimin Su	director	3601B THE CENTER, 989 CHANGLE ROAD SHANGHAI F4 200031
Genghua Gu	director	1ST FLOOR, YUZHENG PLAZA NO.76, YUHUANGSHAN ROAD HANGZHOU, ZHEJIANG PROVINCE F4 310002
Taihong Guo	director	7TH FLOOR, QINGCHUNBAO GROUP NO. 555 XIXI ROAD HANGZHOU F4 310013
Tchaikovsky Bennet Price Jr	other: Former Director	11601 WILSHIRE BOULEVARD, SUITE 2150, LOS ANGELES CA 90025
Marc Thomas Serrio	other: Former Director	P.O. BOX 91836 PASADENA CA 91109