FTRPR.PFD (Frontier Communications) Predictability Rank

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What is Frontier Communications 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.

Frontier Communications 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

Frontier Communications Predictability Rank Related Terms

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Frontier Communications Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Frontier Communications Corp (NAS:FTRPR.PFD) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

401 Merritt 7, Norwalk, CT, USA, 06851

Website

https://www.frontier.com

Frontier Communications Corp is a provider of communications services for consumer and commercial customers in the United States. The portfolio of its services includes Data and Internet services, Video services, Voice services including both the regulated and unregulated voices, Access services, and Advanced Hardware and Network Solutions.

Executives

Sheldon Bruha	officer: Chief Financial Officer	401 MERRITT 7, NORWALK CT 06851
John Maduri	officer: EVP, Chief Customer Officer	401 MERRITT 7, NORWALK CT 06851
Steve Gable	officer: EVP, Chief Technology Officer	FRONTIER COMMUNICATIONS, 401 MERRITT 7, NORWALK CT 06851
Mark D Nielsen	officer: EVP and Chief Legal Officer	FRONTIER COMMUNICATIONS, 401 MERRITT 7, NORWALK CT 06851
Donald Daniels	officer: SVP & Chief Accounting Officer	FRONTIER COMMUNICATIONS, 401 MERRITT 7, NORWALK CT 06851
Kenneth Arndt	officer: EVP, Chief Operations Officer	401 MERRITT 7, NORWALK CT 06851
Elisa Bannon-jones	officer: EVP, Chief HR Officer	401 MERRITT 7, NORWALK CT 06851
Bernard L Han	director, officer: President and CEO	DISH NETWORK CORPORATION, 9601 S. MERIDIAN BLVD., ENGLEWOOD CO 80112
Mohsin Y Meghji	director	C/O LOUGHLIN MEGHJI + COMPANY, NEW YORK NY 10016
Paul Keglevic	director	STELLUS CAPITAL, 10000 MEMORIAL DRIVE STE 500, HOUSTON TX 77024
Kevin L Beebe	director	ONE ALLIED DRIVE, LITTLE ROCK AR 72202
Reeve Pamela D A	director	C/O AMERICAN TOWER CORPORATION, 116 HUNTINGTON AVE, BOSTON MA 02116
Diana Sue Ferguson	director	C/O SARA LEE CORP, 70 W MADISO ST, CHICAGO IL 60602
Virginia P Ruesterholz	director	140 WEST STREET, NEW YORK NY 10007
Mark S Shapiro	director	C/O RED ZONE LLC, 21300 REDSKIN PARK DRIVE, ASHBURN VA 20147