DSGN (Design Therapeutics) Predictability Rank

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What is Design Therapeutics 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.

Design Therapeutics 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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Design Therapeutics Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Design Therapeutics Inc (NAS:DSGN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

6005 Hidden Valley Road, Suite 110, Carlsbad, CA, USA, 92011

Website

https://www.designtx.com

Design Therapeutics Inc is a clinical-stage biopharmaceutical company engaged in the research and development of GeneTACTM molecules, which are a novel class of small-molecule gene-targeted chimera therapeutic candidates designed to be disease-modifying by addressing the underlying cause of diseases caused by inherited nucleotide repeat expansion mutations. The Company's product candidate is in Friedreich ataxia (FA), its second product candidate is in Fuchs endothelial corneal dystrophy (FECD), and it is also advancing its GeneTACTM program to address other serious nucleotide repeat-driven monogenic diseases.

Executives

Deepa Prasad	director	C/O VTV THERAPEUTICS INC., 3980 PREMIER DRIVE, SUITE 310, HIGH POINT NC 27265
Arsani William	director	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
John P. Schmid	director	6310 NANCY RIDGE DRIVE, SUITE 101, SAN DIEGO CA 92121
Heather Behanna	director	C/O ENTASIS THERAPEUTICS HOLDINGS INC., 35 GATEHOUSE DRIVE, WALTHAM MA 02451
Rodney W Lappe	director	C/O MIRATI THERAPEUTICS INC., 4660 LA JOLLA VILLAGE DRIVE, SUITE 500, SAN DIEGO CA 92121
Joao Md Siffert	director, officer: President and CEO	20 ENTERPRISE, SUITE 200, ALISO VIEJO CA 92656
Simeon George	director, 10 percent owner	161 WASHINGTON STREET, SUITE 500, CONSHOHOCKEN PA 19428
Sr One Capital Fund I Aggregator Lp	10 percent owner	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
Stella Xu	director, 10 percent owner	C/O ARMO BIOSCIENCES, INC., 575 CHESAPEAKE DRIVE, REDWOOD CITY CA 94063
Julie Burgess	officer: Chief Accounting Officer	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
Dawn Giangiulio	officer: Principal Accounting Officer	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
Sean Jeffries	officer: Chief Operating Officer	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
Justin Thacker	officer: Vice President, Finance	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
Pratik Shah	director, officer: Executive Chairperson	3366 N. TORREY PINES COURT, SUITE 220, LA JOLLA CA 92037
Cormorant Asset Management, Lp	10 percent owner	200 CLARENDON STREET, 52ND FLOOR, BOSTON MA 02116