FUSB (First US Bancshares) Predictability Rank

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What is First US Bancshares 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 US Bancshares 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 US Bancshares Predictability Rank Related Terms

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First US Bancshares Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » First US Bancshares Inc (NAS:FUSB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

3291 U.S. Highway 280, Suite 100, Birmingham, AL, USA, 35243

Website

https://www.fusb.com

First US Bancshares Inc is a bank holding company. The Bank conducts general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services, and remote deposit capture. The Bank provides a range of commercial banking services to small and medium-sized businesses, property managers, business executives, professionals, and other individuals.

Executives

John Lee Mcphearson	director	P O BOX 249, 131 WEST FRONT ST, THOMASVILLE AL 36784
Marlene M Mccain	director	P O BOX 249, THOMASVILLE AL 36784
Eric H Mabowitz	officer: EVP, Chief Credit Officer-FUSB	P O BOX 249, THOMASVILLE AL 36784
William C Mitchell	officer: Pre/CEO-Acceptance Loan Co Inc	P O BOX 249, THOMASVILLE AL 36784
Robert S Briggs	director
James F House	director, officer: President & CEO	P O BOX 249, THOMASVILLE AL 36784
David Peter Hale	director	131 WEST FRONT STREET, P O BOX 249, THOMASVILLE AL 36784
Thomas S Elley	officer: VP,CFO,PAO,Treas,Asst Sec	P O BOX 249, THOMASVILLE AL 36784
Bearden Andrew C Jr	director
Anthony Cashio	officer: EVP, Chief Credit Officer-FUSB	P O BOX 249, THOMASVILLE AL 36784
Bruce N Wilson	director
Henderson J Samuel Iii	officer: EVP, Bham Market Exec, FUSB	P O BOX 249, THOMASVILLE AL 36784
Sheri S Cook	director	P O BOX 249, THOMASVILLE AL 36784
Aubrey S Miller	director	P O BOX 249, THOMASVILLE AL 36784
Donna D Smith	director	P O BOX 249, THOMASVILLE AL 36784