Federated Hermes Premier Municipalome Fund (Federated Hermes Premier Municipalome Fund) Predictability Rank

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What is Federated Hermes Premier Municipalome Fund 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.

Federated Hermes Premier Municipalome Fund 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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Federated Hermes Premier Municipalome Fund (Federated Hermes Premier Municipalome Fund) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Federated Hermes Premier Municipal Income Fund (NYSE:FMN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

4000 Ericsson Drive, Warrendale, PA, USA, 15086-7561

Website

https://www.federatedinvestors.com

Federated Hermes Premier Municipal Income Fund is a United States-based diversified, closed-end management investment company. The investment objective of the fund is to provide current income exempt from federal income tax, including the federal alternative minimum tax. Its portfolio of investments comprises different sectors such as hospitals, toll road, senior care, airport, tobacco, and other sectors.

Executives

Saba Capital Management, L.p.	10 percent owner	405 LEXINGTON AVENUE, 58TH FLOOR, NEW YORK NY 10174
J Christopher Donahue	director, officer: Trustee and President	5800 CORPORATE DRIVE, PITTSBURGH PA 15237-7000
Boaz Weinstein	10 percent owner	405 LEXINGTON AVENUE, 58TH FLOOR, NEW YORK NY 10174
Banc Of America Preferred Funding Corp	10 percent owner	214 NORTH TRYON STREET, CHARLOTTE NC 28255
Christopher Herkins	other: Senior Trader	1001 LIBERTY AVENUE, PITTSBURGH PA 15222-3779
Duwayne Walker	other: Portfolio Manager	1001 LIBERTY AVENUE, PITTSBURGH PA 15222
Madelyn A Reilly	director	C/O 1001 LIBERTY AVENUE, PITTSBURGH PA 15222
Gallagher James J. Ii	other: Director, Fed. Inv. Mgmt Co.	500 DELAWARE AVENUE, SUITE 1500, WILMINGTON DE 19801
Patrick Benacci	other: Senior Trader	1001 LIBERTY AVENUE, PITTSBURGH PA 15222-3779
G. Thomas Hough	director	P.O. BOX 407, LAKELAND FL 33802
Meter Stephen Van	officer: Chief Compliance Officer	FEDERATED INVESTORS TOWER, 1001 LIBERTY AVENUE, PITTSBURGH PA 15222-3779
John T Collins	director	THE COLLINS GROUP, 60 STATE ST, SUITE 700, BOSTON MA 02109
P Jerome Richey	director	1800 WASHINGTON ROAD, PITTSBURGH PA 15421-1421
Bank Of America Na	10 percent owner	100 N. TRYON STREET, CHARLOTTE NC 28255
Blue Ridge Investments, L.l.c.	10 percent owner	ONE BRYANT PARK, NEW YORK NY 10036