FBSI (First Bancshares /MO/) Predictability Rank

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What is First Bancshares /MO/ Predictability Rank?

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.

First Bancshares /MO/ 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

First Bancshares /MO/ Predictability Rank Related Terms

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First Bancshares /MO/ Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » First Bancshares Inc /MO/ (OTCPK:FBSI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

142 East First Street, P.O. Box 777, Mountain Grove, MO, USA, 65711

Website

https://www.thestockmensbank.com

First Bancshares Inc /MO/ is a holding company. The Stockmens bank offers services such as online banking, personal banking, and business banking. The bank provides community banking services and is engaged in the business of attracting deposits from, and making loans to, the general public, including individuals and businesses. It originates real estate loans, including one-to-four family residential mortgage loans, multi-family residential loans, commercial real estate loans, and commercial business loans, agricultural business and consumer loans. The bank also invests in mortgage-back securities, United States Government and agency securities, and other assets.

Executives

Thomas M Sutherland	director	302 EAST SOUTH STREET, OZARK MO 65721
Richard Bradley Weaver	director, officer: Chairman of the Board and CEO	142 E. FIRST STREET, MOUNTAIN GROVE MO 65711
D Mitch Ashlock	director	142 EAST FIRST STREET, MOUNTAIN GROVE MO 65711
Breidenthal Robert Jack Jr	other: Advisory Director	142 EAST FIRST STREET, MOUNTAIN GROVE MO 65711
Lannie E Crawford	officer: President	142 E. FIRST STREET, MOUNTAIN GROVE MO 65711
John K Francka	officer: Senior VP-Chief Credit Officer	142 EAST FIRST STREET, MOUNTAIN GROVE MO 65711
Dale W Keenan	officer: Exec.VP-Senior Loan Officer	142 EAST FIRST STREET, MOUNTAIN GROVE MO 65711
Ronald J Walters	officer: Senior Vice President and CFO	103 MALLARD AVE., STORM LAKE IA 50588
James W Duncan	officer: President and CEO	C/O FIRST BANCSHARES INC, 142 E FIRST, MOUNTAIN GROVE MO 65711
Adrian C Rushing	officer: Sr. Vice President-Operations	502 SHORES PARKWAY, ROGERSVILLE MO 65742
Daniel P Katzfey	officer: Executive VP and CLO	5615 S. NEWTON, SPRINGFIELD MO 65819
Sonya G Everett	officer: Secretary	142 E. FIRST STREET, MOUNTAIN GROVE MO 65711
Harold F Glass	director	1736 E SUNSHINE SUITE 405, SPRINGFIELD MO 65804
Billy Eugene Hixon	director	3580 W. MORNINGSIDE PLACE, SPRINGFIELD MO 65807
Susan J Uchtman	officer: CFO	4927 HIGHWAY W, MOUNTAIN GROVE MO 65711