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Hong Kong Johnson Holdings Co (HKSE:01955) Predictability Rank


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What is Hong Kong Johnson Holdings Co 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.


Hong Kong Johnson Holdings Co 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

Hong Kong Johnson Holdings Co Predictability Rank Related Terms

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Hong Kong Johnson Holdings Co Business Description

Traded in Other Exchanges
N/A
Address
No. 143 Hoi Bun Road, 11th Floor, China Aerospace Centre, Kwun Tong, Kowloon, Hong Kong, HKG
Hong Kong Johnson Holdings Co Ltd is an investment holding company. The company is engaged in providing a wide range of environmental hygiene services in Hong Kong including the provision of building cleaning services, park and recreation center cleaning services, street cleaning services, institutional cleaning services, pest management services, garbage logistics services, and environmental improvement services.
Executives
Xiang Gang Hua Fa Tou Zi Kong Gu You Xian Gong Si 2101 Beneficial owner
Zhu Hai Hua Fa Ji Tuan You Xian Gong Si 2201 Interest of corporation controlled by you
Lai Chun Tung 2305 Beneficiary of a trust
Xiang Gang Nan Yang Guo Ji Mao Yi You Xian Gong Si 2101 Beneficial owner
Shang Hai Shi Ye Tou Zi You Xian Gong Si 2201 Interest of corporation controlled by you
Shang Shi Guo Ji Tou Zi You Xian Gong Si 2201 Interest of corporation controlled by you
Shang Hai Shi Ye Zhi Ye You Xian Gong Si 2201 Interest of corporation controlled by you
Shang Hai Shi Ye Ji Tuan You Xian Gong Si 2201 Interest of corporation controlled by you
Lee Wing Yee Loretta 2307 Founder of a discretionary trust who can infl
Best Approach Developments Limited 2201 Interest of corporation controlled by you
Lai Kin Man 2307 Founder of a discretionary trust who can infl
Yi Feng Development Limited 2201 Interest of corporation controlled by you
Hsbc International Trustee Limited 2301 Trustee
Harvest Vista Company Limited 2201 Interest of corporation controlled by you
Century Rise Development Limited 2201 Interest of corporation controlled by you

Hong Kong Johnson Holdings Co Headlines

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