What is Expensify 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.
Expensify 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
Expensify (Expensify) Business Description
Traded in Other Exchanges
N/A
Address
401 Southwest 5th Avenue, Portland, OR, USA, 97204
Expensify Inc is a cloud-based expense management software platform that helps the smallest to the largest businesses simplify the way they manage money. Over 12 million people use Expensify's free features, which include corporate cards, expense tracking, next-day reimbursement, invoicing, bill pay, and travel booking in one app.
Executives
| Anuradha Muralidharan |
director, officer: Chief Operating Officer |
C/O EXPENSIFY, INC., 401 SW 5TH AVENUE, PORTLAND OR 97204 |
| Jason Fahr Mills |
director |
C/O EXPENSIFY, INC., 401 SW 5TH AVENUE, PORTLAND OR 97204 |
| Daniel Vidal |
director |
C/O EXPENSIFY, INC., 401 SW 5TH AVENUE, PORTLAND OR 97204 |
| David Michael Barrett |
director, officer: Chief Executive Officer |
C/O EXPENSIFY, INC., 401 SW 5TH AVENUE, PORTLAND OR 97204 |
| Ryan Schaffer |
director, officer: Chief Financial Officer |
C/O EXPENSIFY, INC., 401 SW 5TH AVENUE, PORTLAND OR 97204 |
| Timothy L Christen |
director |
715 SOUTH STREET, MAYVILLE WI 53050 |
| Steven J. Mclaughlin |
10 percent owner |
277 PARK AVENUE 29TH FLOOR, SUITE B, NEW YORK NY 10172 |
| Ying Liu |
director |
C/O EXPENSIFY, INC., 401 SW 5TH AVENUE, PORTLAND OR 97204 |
| Sf Roofdeck Gp Llc |
10 percent owner |
1521 ALTON ROAD, #345, MIAMI BEACH FL 33139 |
| Steven J. Mclaughlin Revocable Trust |
10 percent owner |
1521 ALTON ROAD, #345, MIAMI BEACH FL 33139 |
| Exp 2020 Spv Lp |
10 percent owner |
1521 ALTON ROAD, #345, MIAMI BEACH FL 33139 |
| Openview Management, Llc |
10 percent owner |
C/O OPENVIEW VENTURE PARTNERS, 303 CONGRESS STREET, 6TH FLOOR, BOSTON MA 02210 |
| David Martirano |
other: See Remarks |
50 MILK STREET, 16TH FLOOR, BOSTON MA 02109 |
| Demartini James G B Iii |
10 percent owner |
THREE LAGOON DRIVE, SUITE 400, REDWOOD CITY CA 94065 |
| Unameit Trust Under Declaration Of Trust Dated March 10, 2000 |
10 percent owner |
THREE LAGOON DRIVE, SUITE 400, REDWOOD CITY CA 94065 |
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