Funko (FNKO) Predictability Rank

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What is Funko 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.

Funko 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

Funko Predictability Rank Related Terms

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Funko (FNKO) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Funko Inc (NAS:FNKO) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

FU2:Germany

Address

2802 Wetmore Avenue, Everett, WA, USA, 98201

Website

https://www.funko.com

Funko Inc is an us-based pop culture consumer products company. It creates whimsical, fun, and different products which enable the customer to express their affinity for their favorite through the movie, TV show, video game, musician, or sports team. The company holds licenses and the rights to create tens of thousands of characters including Game of Thornes, Walking Dead, Disney, Marvel, Harry Potter, Fallout, and others. Its products include Pop, Dorbz, Mystery Vinyl, Plush, Action Figures, and Others. The company sells its products through a diverse network of retail customers across multiple retail channels, including specialty retailers, mass-market retailers, and e-commerce sites.

Executives

Mike Kerns	director	12180 MILLENNIUM DRIVE, SUITE 500, PLAYA VISTA CA 90094
Working Capital Advisors (uk) Ltd.	10 percent owner	QUERIPEL HOUSE, UNIT 2, 1 DUKE OF YORK SQUARE, LONDON X0 SW3 4LY
Steve Nave	officer: CFO and COO	300 MADISON AVENUE, 7TH FLOOR, TOLEDO OH 43604
Kenneth Chan Hsiang-tze	10 percent owner	QUERIPEL HOUSE UNIT 2, 1 DUKE OF YORK SQUARE, LONDON X0 SW3 4LY
Working Capital Management Pte. Ltd.	10 percent owner	3 PHILLIP STREET,, 17-01 ROYAL GROUP BUILDING, SINGAPORE U0 048693
Andrew Mark Perlmutter	officer: PRESIDENT	C/O FUNKO, INC., 2802 WETMORE AVENUE, EVERETT WA 98201
Andrew David Oddie	officer: CHIEF REVENUE OFFICER	C/O FUNCO, INC., 2802 WETMORE AVENUE, EVERETT WA 98201
Tracy D Daw	officer: See Remarks	2601 ELLIOTT AVENUE, SUITE 1000, SEATTLE WA 98121
Scott Yessner	officer: Interim CFO	C/O FUNKO, INC., 2802 WETMORE AVENUE, EVERETT WA 98201
Jung Jennifer Fall	officer: Chief Financial Officer	C/O FUNKO, INC., WETMORE AVENUE, EVERETT WA 98201
Trevor A Edwards	director	2080 NW 133RD PLACE, PORTLAND OR 97229
Kenneth R. Brotman	director	C/O FUNKO, INC., 2802 WETMORE AVENUE, EVERETT WA 98201
Tcg Capital Management, Lp	10 percent owner	12180 MILLENNIUM DRIVE, SUITE 500, PLAYA VISTA CA 90094
Tcg 3.0 Fuji, Lp	10 percent owner	12180 MILLENNIUM DRIVE, SUITE 500, PLAYA VISTA CA 90094
Richard A. Paul	director	80 PINE STREET, SUITE 3202, NEW YORK NY 10005