CTI BioPharma (CTI BioPharma) Predictability Rank

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What is CTI BioPharma 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.

CTI BioPharma 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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CTI BioPharma (CTI BioPharma) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » CTI BioPharma Corp (NAS:CTIC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

3101 Western Avenue, Suite 800, Seattle, WA, USA, 98121

Website

https://www.ctibiopharma.com

CTI BioPharma Corp is a biopharmaceutical company focused on the acquisition, development, and commercialization of less toxic and more effective cancer therapies. Its therapeutic area is blood-related cancers. Its products under the pipeline include Pacritinib. Pacritinib is an investigational oral kinase inhibitor for the treatment of adult patients with myelofibrosis.

Executives

James K Fong	officer: EVP & Chief Commercial Officer	C/O CTI BIOPHARMA CORP, 3101 WESTERN AVENUE, SUITE 800, SEATTLE WA 98121
Adam R Craig	director, officer: President and CEO	C/O INNOVIVE PHARMACEUTICALS, INC., 555 MADISON AVENUE, 25TH FLOOR, NEW YORK NY 10022
David Kirske	officer: EVP, Chief Financial Officer	C/O CTI BIOPHARMA CORP., 3101 WESTERN AVE., SUITE 600, SEATTLE WA 98121
Michael A Metzger	director	C/O SYNDAX PHARMACEUTICALS, INC., 400 TOTTEN POND ROAD,, WALTHAM MA 02451
Biotechnology Value Fund L P	other: See Explanation of Responses	44 MONTGOMERY STREET, 40TH FL, SAN FRANCISCO CA 94104
Diane L. Parks	director	29 EMMONS DRIVE, SUITE B-10, PRINCETON NJ 08540
Matthew D Perry	director	ONE SANSOME STREET, 30TH FLOOR, SAN FRANCISCO CA 94104
Orbimed Advisors Llc	10 percent owner	601 LEXINGTON AVENUE, 54TH FLOOR, NEW YORK NY 10022
Bvf I Gp Llc	10 percent owner	44 MONTGOMERY ST., 40TH FLOOR, SAN FRANCISCO CA 94104
Bvf Gp Holdings Llc	10 percent owner	44 MONTGOMERY ST., 40TH FLOOR, SAN FRANCISCO CA 94104
Bvf Ii Gp Llc	other: See Explanation of Responses	44 MONTGOMERY ST., 40TH FLOOR, SAN FRANCISCO CA 94104
Laurent Fischer	director	C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL WAY, REDWOOD CITY CA 94063
David Ross Parkinson	director	C/O THRESHOLD PHARMACEUTICALS, INC., 170 HARBOR WAY SUITE 300, SOUTH SAN FRANCISCO CA 94080
Richard L Love	director
Biotechnology Value Fund Ii Lp	other: See Explanation of Responses	44 MONTGOMERY STREET, 40TH FL, SAN FRANCISCO CA 94104