What is Hyperfine 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.
Hyperfine 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
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
Hyperfine (Hyperfine) Business Description
Traded in Other Exchanges
N/A
Address
351 New Whitfield Street, Guilford, CT, USA, 06437
Hyperfine Inc is a medical device company that created Swoop. The Swoop Portable MR Imaging System produces high-quality images at a lower magnetic field strength than conventional MRI scanners. Legacy Hyperfine and Liminal represent two operating segments of the company. The company derives its sales from the following sources: 1) device sales which consist of sales of MRI devices and 2) service sales which consist of sales from subscriptions of bundled devices, maintenance, and software.
Executives
| Thomas Teisseyre |
officer: Chief Operating Officer |
C/O HYPERFINE, INC., 351 NEW WHITFIELD STREET, GUILFORD CT 06437 |
| Khan Siddiqui |
officer: See Remarks |
530 OLD WHITFIELD STREET, GUILFORD CT 06437 |
| Brett Hale |
officer: Chief Administrative Officer |
C/O HYPERFINE, INC., 351 NEW WHITFIELD STREET, GUILFORD CT 06437 |
| Maria Sainz |
director |
C/O ORTHOFIX INTERNATIONAL N. V., 3451 PLANO PARKWAY, LEWISVILLE TX 75056 |
| Jonathan M Rothberg |
director, 10 percent owner |
C/O BUTTERFLY NETWORK, INC., 530 OLD WHITFIELD ST., GUILFORD CT 06437 |
| Alok Gupta |
officer: Chief Financial Officer |
530 OLD WHITFIELD STREET, GUILFORD CT 06437 |
| Neela Paykel |
officer: Gen Counsel & Corp Secretary |
530 OLD WHITFIELD STREET, GUILFORD CT 06437 |
| David D Scott |
director, officer: President and CEO |
530 OLD WHITFIELD STREET, GUILFORD CT 06437 |
| Ruth A Fattori |
director |
1303 EAST ALGONQUIN ROAD, SCHAUMBURG IL 60196 |
| Hc Sponsor Llc |
10 percent owner |
31 HUDSON YARDS, 10TH FLOOR, 28TH FLOOR, NEW YORK NY 10001 |
| Arthur Bruce Cohen |
10 percent owner |
12 SOUTH MAIN STREET, SUITE #203, NORWALK CT 06854 |
| Healthcor Group, Llc |
10 percent owner |
31 HUDSON YARDS, 10TH FLOOR, NEW YORK NY 10001 |
| Joseph Patrick Healey |
10 percent owner |
31 HUDSON YARDS, 10TH FLOOR, NEW YORK NY 10001 |
| R Scott Huennekens |
director |
C/O VOLCANO CORPORATION, 11455 EL CAMINO REAL, SUITE 460, SAN DIEGO CA 92130 |
| Scott A. White |
officer: Chief Commercial Officer |
530 OLD WHITFIELD STREET, GUILFORD CT 06437 |
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