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Orbitz Worldwide (FRA:32O) Predictability Rank


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What is Orbitz Worldwide 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.

Orbitz Worldwide 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Orbitz Worldwide Predictability Rank Related Terms

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Orbitz Worldwide Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Orbitz Worldwide Inc (FRA:32O) » Definitions » Predictability Rank
Comparable Companies
XMAD:PQR OSTO:FOI B TSE:7867 SZSE:300526 ISCA TSE:8114 TSE:8050 SAU:1830 SZSE:300793 TSE:4680 SZSE:300123 SZSE:002605 OSW HKSE:00678 SHSE:688010 TSE:9603 TPE:1736 XPAR:BEN XTER:BVB TSE:9681
Traded in Other Exchanges
N/A
Address
Website
http://www.orbitz.com
Orbitz Worldwide Inc was incorporated in Delaware on June 18, 2007 and was formed to be the parent company of the business-to-consumer travel businesses of Travelport, including Orbitz, ebookers and HotelClub and the related subsidiaries and affiliates of those businesses. It is an online travel company that uses technology to enable leisure and business travelers to research, plan and book travel products and services. Its brand portfolio includes Orbitz and CheapTickets in the Americas; ebookers in Europe; and HotelClub and RatesToGo based in Australia, which have operations globally (collectively referred to as HotelClub). It also owns and operates Orbitz for Business, a corporate travel company, and Orbitz Partner Network group, which delivers private label travel solutions to partners. It provides customers with the ability to book travel products and services from suppliers worldwide, including air travel, hotels, vacation packages, car rentals, cruises, rail tickets, travel insurance and destination services such as ground transportation, event tickets and tours. Orbitz.com is its brand and sells a full suite of travel products and services, including flights, hotels, car rentals, cruises, and vacation packages. CheapTickets is a U.S. travel website that targets value-conscious customers. CheapTickets offers customers travel products and services, including air travel, hotels, car rentals, cruises, travel insurance, destination services and event tickets from suppliers worldwide on a stand-alone basis or as part of a vacation package. Customers can also book travel products from their mobile devices through a mobile website. Orbitz for Business leverages and customizes its technology expertise for corporate travelers, offering a complete portfolio of travel products and services that help corporate customers plan, search and book business travel. Orbitz for Business delivers full service, cost-effective travel products and travel management solutions, including 24/7 support along with expense reporting and policy management tools. ebookers is a pan-European online travel agency that offers customers the ability to search for and book travel products and services through websites in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. Customers can book travel products and services, including airline tickets, hotel rooms, car rentals, rail tickets and travel insurance, on a stand-alone basis or as part of a vacation package. ebookers also offers customers the ability to book travel products from their mobile phones through the ebookers App for iPhone, Android and iPad and mobile website. HotelClub is a global hotel booking website offering members a worldwide selection of hotel properties across more than 140 countries. The Company uses a combination of online and traditional offline marketing. The Company's competition includes: online and offlin

Orbitz Worldwide Headlines

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