ECOR (electroCore) Predictability Rank

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What is electroCore 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.

electroCore 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

electroCore Predictability Rank Related Terms

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electroCore Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » electroCore Inc (NAS:ECOR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

200 Forge Way, Suite 205, Rockaway, NJ, USA, 07866

Website

https://www.electrocore.com

electroCore Inc is a commercial stage bioelectronic medicine company with a platform for non-invasive vagus nerve stimulation therapy initially focused on neurology. The company's product gammaCore is Food and Drug Administration cleared in the United States for adjunctive use for the preventive treatment of cluster headache in adult patients, the acute treatment of pain associated with episodic cluster headache in adult patients, the acute treatment of pain associated with migraine headache in adult patients, and the prevention of migraine in adult patients, The use of gammaCore by adolescent patients and Treatment of hemicrania continua and paroxysmal hemicrania in adult patients.

Executives

Daniel S Goldberger	director, officer: Chief Executive Officer	24 CARPENTER ROAD, CHESTER NY 10918
Thomas J. Errico	director, 10 percent owner	150 ALLEN ROAD, SUITE 201, BASKING RIDGE NJ 97920
John P Gandolfo	director	62 TERRACE ROAD, WAYNE NJ 07470
Joseph P Errico	director, 10 percent owner, officer: See Remarks	150 ALLEN ROAD, SUITE 201, BASKING RIDGE NJ 07920
Trevor J Moody	director	150 ALLEN ROAD, SUITE 201, BASKING RIDGE NJ 07920
Julie Ann Goldstein	director	205 FORGE WAY, ROCKAWAY NJ 07866
Patricia Wilber	director	205 FORGE WAY, SUITE 205, ROCKAWAY NJ 07866
Brian M Posner	officer: Chief Financial Officer	1590 REED ROAD, PENNINGTON NJ 08534
Tullis James L L	director	100 FIRST STAMFORD PLACE, STAMFORD CT 06907
Thomas M Patton	director	C/O OSTEOTCH INC., 51 JAMES WAY, EATONTOWN NJ 07724
F Peter Cuneo	director	10 EAST 40TH ST, NEW YORK NY 10016
Stephen Ondra	director	150 ALLEN ROAD, SUITE 201, BASKING RIDGE NJ 07920
Nicholas Colucci	director	150 ALLEN ROAD, SUITE 201, BASKING RIDGE NJ 07920
Michael G Atieh	director	MERCK MEDCO MANAGED CARE INC, 100 SUMMIT AVE, MONTVALE NJ 07645
Carrie Smith Cox	director	SCHERING-PLOUGH CORPORATION, 2000 GALLOPING HILL ROAD, KENILWORTH NJ 07033