What is Dream Finders Homes Predictability Rank?
Not Rated
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.
Dream Finders Homes 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
Dream Finders Homes (Dream Finders Homes) Business Description
Traded in Other Exchanges
N/A
Address
14701 Philips Highway, Suite 300, Jacksonville, FL, USA, 32256
Dream Finders Homes Inc is engaged in the home building business. It designs, builds, and sells homes in Jacksonville, Orlando, Denver, the Washington D.C. metropolitan area, and Austin. The company operates through six geographical divisions namely, Jacksonville, Orlando, Denver, Washington DC (Capital), and the Carolinas (H&H Homes), Jet Home Loans LLC. Jacksonville division generates most of the revenue for the firm.
Executives
| Patrick O. Zalupski |
director, officer: President and CEO |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Lorena Anabel Fernandez |
officer: CFO |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Doug Moran |
officer: Senior VP and COO |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Len Sturm |
director |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Justin Udelhofen |
director |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Walton William H Iii |
director |
ONE INDEPENDENT DRIVE, SUITE 1600, JACKSONVILLE FL 32202 |
| William Weatherford |
director |
19701 BETHEL CHURCH ROAD #302, CORNELIUS NC 28031 |
| Robert E. Riva |
officer: VP, GC and Corporate Secretary |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Boston Omaha Corp |
10 percent owner |
1601 DODGE STREET, SUITE 3300, OMAHA NE 68102 |
| Boc Dfh, Llc |
10 percent owner |
1601 DODGE STREET, SUITE 3300, OMAHA NE 68102 |
| United Casualty & Surety Insurance Co. |
other: SUBSID of Boston Omaha Corp |
292 NEWBURY STREET, BOX 105, BOSTON MA 02115 |
| John O. Blanton |
officer: VP and CAO |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Rick A. Moyer |
officer: Senior VP and CFO |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Megha H. Parekh |
director |
14701 PHILIPS HIGHWAY, SUITE 300, JACKSONVILLE FL 32256 |
| Lovett William Radford Ii |
director |
C/O EVERBANK FINANCIAL CORP, 501 RIVERSIDE AVENUE, JACKSONVILLE FL 32202 |
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