Greenheart Group (HKSE:00094) Predictability Rank

View and export this data going back to 1988. Start your Free Trial

What is Greenheart Group 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.

Greenheart Group 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

Greenheart Group Predictability Rank Related Terms

Thank you for viewing the detailed overview of Greenheart Group's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Greenheart Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Forest Products » Greenheart Group Ltd (HKSE:00094) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 77-79 Gloucester Road, 32A, 32th Floor, Fortis Tower, Wanchai, Hong Kong, HKG

Website

http://www.greenheartgroup.com

Greenheart Group Ltd is an investment holding company. The company, along with its subsidiaries, is engaged in log harvesting, timber processing, marketing, sales and trading of logs and timber products, provision of forest management services, and managing harvest rights of concession. It has two reportable segments, Suriname involves the Selective hardwood log harvesting, timber processing, marketing, sale, and trading of logs and timber products and the management and operation of forest concessions; and New Zealand involves softwood plantation management, log harvesting, marketing, sale and trading of logs and provision of forest management services. Its majority revenue-generating region is New Zealand.

Executives

Cheng Yu Tung Family (holdings) Limited	2201 Interest of corporation controlled by you
Chow Tai Fook (holding) Limited	2201 Interest of corporation controlled by you
Chow Tai Fook Capital Limited	2201 Interest of corporation controlled by you
Cheng Yu Tung Family (holdings Ii) Limited	2201 Interest of corporation controlled by you
Chow Tai Fook Nominee Limited	2201 Interest of corporation controlled by you
Gallant Elite International Limited	2201 Interest of corporation controlled by you
Lai Wing Lun	2104 Agent
Arab Osman Mohammed	2104 Agent
Mak Siu Hang Viola	2201 Interest of corporation controlled by you
Idea Perfect Holdings Limited	2501 Other
Vms Investment Group Limited	2201 Interest of corporation controlled by you
Wu Wai Leung Danny
Hong Kong Genghis Khan Group Limited	2101 Beneficial owner
Ge Jian	2201 Interest of corporation controlled by you
China Forestry Group Corporation	2201 Interest of corporation controlled by you

Greenheart Group Headlines

No Headlines