INM (InMed Pharmaceuticals) Predictability Rank

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What is InMed Pharmaceuticals 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.

InMed Pharmaceuticals 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

InMed Pharmaceuticals Predictability Rank Related Terms

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InMed Pharmaceuticals Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » InMed Pharmaceuticals Inc (NAS:INM) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

MWG:Germany MWG:Germany

Address

885 West Georgia Street, Suite 1445, Vancouver, BC, CAN, V6C 3E8

Website

https://www.inmedpharma.com

InMed Pharmaceuticals Inc is a Canada based clinical-stage biopharmaceutical company. The company is engaged in the research and development of novel, cannabinoid-based, and manufacturing of Pharmaceutical grade cannabinoids. Its product portfolio includes INM-755, which is used for the treatment of epidermolysis bullosa; INM-088 for the treatment of glaucoma; INM-901 for Alzheimer's disease, INM-089's pharmacological and IntegraSyn which is a manufacturing system for Pharmaceutical-Grade Cannabinoids.

Executives

Mancini Alexandra Diane Janet	officer: Sr VP, Clinical Reg Affairs	C/O INMED PHARMACEUTICALS INC., SUITE 310 - 815 HASTINGS STREET, VANCOUVER A1 V6C 1B4
Andrew Hull	director	C/O INMED PHARMACEUTICALS INC., SUITE 310 - 815 HASTINGS STREET, VANCOUVER A1 V6C 1B4
Eric A Adams	director, officer: President & CEO	C/O INMED PHARMACEUTICALS INC., SUITE 310 - 815 HASTINGS STREET, VANCOUVER A1 V6C 1B4
Jonathan Tegge	officer: Interim CFO	217 W. MAIN STREET, SOMERVILLE NJ 08876
Sarah Li	officer: VP, Accounting and Controller	310-815 WEST HASTINGS ST., VANCOUVER Z4 V6C1B4
Nicole Lemerond	director	3 MURRAY HILL ROAD, SCARSDALE NY 10583
Bryan T Baldasare	director	3471 RIVER HILLS DRIVE, CINCINNATI OH 45244
Brenda Edwards	officer: Interim CFO	111-1232 JOHNSON ST., COQUITLAM A1 V3B 4T2
Janet P Grove	director	510 WEST GEORGIA STREET, SUITE 1800, VANCOUVER A1 V5T 4T5
Bruce Colwill	officer: CFO	C/O INMED PHARMACEUTICALS INC., SUITE 310 - 815 HASTINGS STREET, VANCOUVER A1 V6C 1B4
Shane Aaron Johnson	officer: SVP & GM of BayMedica LLC	930 TAHOE BLVD., SUITE 802-433, INCLINE VILLAGE NV 89451
Adam D. Cutler	director	9301 AMBERGLEN BOULEVARD, SUITE 100, C/O MOLECULAR TEMPLATES, INC., AUSTIN TX 78729
William J Garner	director	875 MAHLER ROAD, SUITE 235, BURLINGAME CA 94010
Catherine Sazdanoff	director	3471 RIVER HILLS DRIVE, CINCINNATI OH 45244
Eric C Hsu	officer: Sr. VP, Pre-Clinical Res/Dev	C/O INMED PHARMACEUTICALS INC., SUITE 310 - 815 HASTINGS STREET, VANCOUVER A1 V6C 1B4