CFN Enterprises (CFN Enterprises) Predictability Rank

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What is CFN Enterprises 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.

CFN Enterprises 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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CFN Enterprises (CFN Enterprises) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » CFN Enterprises Inc (OTCPK:CNFN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

600 E.8th Street, Whitefish, MT, USA, 59937

Website

https://www.cfnenterprisesinc.com

CFN Enterprises Inc is a creative agency and media network dedicated to the legal cannabis industry. Its CFN Business generates revenue through sponsored content, articles, press releases, videos, podcasts, advertisements, and other media, email advertisements, and other marketing campaigns run on behalf of public and private companies in the cannabis industry.

Executives

Anness Ziadeh	officer: Chief Sales/Marketing Officer	600 EAST 8TH STREET, WHITEFISH MT 59937
Rami Abi	10 percent owner, officer: Chief Strategy Officer	600 EAST 8TH STREET, WHITEFISH MT 59937
Allen Park	10 percent owner, officer: Chief Operating Officer	600 EAST 8TH STREET, WHITEFISH MT 59937
Brian S Ross	director, officer: President & CEO	C/O ACCELERIZE NEW MEDIA, INC., 6477 HIGHWAY 93 SOUTH, SUITE 303, WHITEFISH MT 59937
Anthony Zingarelli	10 percent owner	600 E. 8TH STREET, WHITEFISH MT 59937
Frank Lane	officer: President of CFN Media	2601 OCEAN PARK BLVD., SUITE 310, SANTA MONICA CA 90405
Darren Dayton	10 percent owner	143 CALLE MAYOR, REDONDO BEACH CA 90277
Ryan Beedie Family Trust Iii	10 percent owner	1730-1111 WEST GEORGIA STREET, VANCOUVER A1 V6E 4M3
Ryan Beedie	10 percent owner	1730-1111 WEST GEORGIA STREET, VANCOUVER A1 V6E 4M3
4358 Investments Ltd	10 percent owner	1730-1111 WEST GEORGIA STREET, VANCOUVER A1 V6E 4M3
Beedie Oyii Holdings Ltd.	10 percent owner	1730-1111 WEST GEORGIA STREET, VANCOUVER A1 V6E 4M3
Beedie Investments Ltd	10 percent owner	1730-1111 WEST GEORGIA STREET, VANCOUVER A1 V6E 4M3
Beedie Holdings Ltd.	10 percent owner	1730-1111 WEST GEORGIA STREET, VANCOUVER A1 V6E 4M3
Paul Dumais	officer: Sr. VP, Product Development	C/O ACCELERIZE, INC., 20411 SW BIRCH STREET, SUITE 250, NEWPORT BEACH CA 92660
Damon S Stein	officer: General Counsel	C/O ACCELERIZE NEW MEDIA, INC., 6477 HIGHWAY 93 SOUTH, SUITE 303, WHITEFISH MT 59937