eFFECTOR Therapeutics (eFFECTOR Therapeutics) Predictability Rank

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What is eFFECTOR 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.

eFFECTOR 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

eFFECTOR Therapeutics Predictability Rank Related Terms

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eFFECTOR Therapeutics (eFFECTOR Therapeutics) Business Description

Industry

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

Comparable Companies

Traded in Other Exchanges

LWK:Germany LWK:Germany

Address

142 North Cedros Avenue, Suite B, Solana Beach, CA, USA, 92075

Website

https://www.effector.com

eFFECTOR Therapeutics Inc is a clinical-stage biopharmaceutical company focused on pioneering the development of a new class of oncology drugs referred to as selective translation regulator inhibitors (STRIs).

Executives

Sr One Capital Fund I Aggregator Lp	10 percent owner	C/O DESIGN THERAPEUTICS, INC., 6005 HIDDEN VALLEY ROAD, SUITE 110, CARLSBAD CA 92011
Christopher B Ehrlich	director, 10 percent owner, officer: Chief Executive Officer	499 ILLINOIS STREET, SUITE 200, SAN FRANCISCO CA 94158
Mayank Gandhi	officer: Chief Business Officer	628 MIDDLEFIELD ROAD, PALO ALTO CA 94301
Douglas J Warner	officer: Chief Medical Officer	C/O EFFECTOR THERAPEUTICS, INC., 142 NORTH CEDROS AVENUE, SUITE B, SOLANA BEACH CA 92075
Presidio Management Group X Llc	10 percent owner	2735 SAND HILL ROAD, MENLO PARK CA 94025
Carlyle Group Inc.	10 percent owner	C/O THE CARLYLE GROUP, 1001 PENNSYLVANIA AVENUE, N.W., WASHINGTON DC 20004
Carlyle Genesis Uk Llc	10 percent owner	C/O THE CARLYLE GROUP, 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004
Carlyle Investment Management Llc	10 percent owner	1001 PENNSYLVANIA AVE. N.W., WASHINGTON DC 20004
Carlyle Holdings I L.p.	10 percent owner	C/O THE CARLYLE GROUP L.P., 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505
Carlyle Holdings I Gp Inc.	10 percent owner	C/O THE CARLYLE GROUP L.P., 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505
Tc Group, Llc	10 percent owner	C/O CARLYLE GROUP, 1001 PENNSYLVANIA AVENUE NW SUITE 220 S, WASHINGTON DC 20004
Cg Subsidiary Holdings L.l.c.	10 percent owner	C/O THE CARLYLE GROUP, SUITE 220 SOUTH, 1001 PENNSYLVANIA AVENUE, N.W., WASHINGTON DC 20004
Carlyle Holdings I Gp Sub L.l.c.	10 percent owner	C/O THE CARLYLE GROUP L.P., 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505
Gallagher Brian M. Jr.	director, 10 percent owner	C/O AILERON THERAPEUTICS, INC., 281 ALBANY STREET, CAMBRIDGE MA 02139
Stephen T Worland	director, officer: President and Chief Executive	9050 CAMINO SANTA FE, SAN DIEGO CA 92121