What is Kindred Biosciences 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.
Kindred Biosciences 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
Kindred Biosciences (Kindred Biosciences) Business Description
Traded in Other Exchanges
N/A
Address
1555 Bayshore Highway, Suite 200, Burlingame, CA, USA, 94010
Kindred Biosciences Inc is a biopharmaceutical company developing innovative biologics focused on saving and improving the lives of pets. The company identifies targets that have already demonstrated safety and efficacy in humans and develop therapeutics based on these validated targets for dogs and cats. It has a pipeline of novel biologics in development across many therapeutic classes, alongside biologics manufacturing capabilities and a broad intellectual property portfolio.
Executives
| Richard Chin |
director, officer: Chief Executive Officer |
C/O OXIGENE, INC., 230 THIRD AVENUE, WALTHAM MA 02451 |
| Park West Asset Management Llc |
10 percent owner |
1 LETTERMAN DRIVE, SUITE C5-900, SAN FRANCISCO CA 94129 |
| Denise Bevers |
director |
C/O KINDRED BIOSCIENCES, INC. 1555 BAYSHORE HIGHWAY, SUITE 200 BURLINGAME CA 94010 |
| Wendy Wee |
officer: Chief Financial Officer |
C/O TELIK, INC. 700 HANSEN WAY PALO ALTO CA 94304 |
| Hangjun Zhan |
officer: Chief Scientific Officer |
C/O KINDRED BIOSCIENCES, INC. 1555 BAYSHORE HIGHWAY, SUITE 200 BURLINGAME CA 94010 |
| Ernest Mario |
director |
20 FAIRMOUNT AVENUE, P.O. BOX 445, CHATHAM NJ 07928 |
| Joseph S Mccracken |
director |
C/O NEXVET BIOPHARMA PLC, NATL INST, FOSTERS AVENUE, MOUNT MERRION, BLACKROCK L2 00000 |
| Herbert D Montgomery |
director |
C/O ATKINSON 1001 BAYHILL DRIVE 2ND FL SAN BRUNO CA 94066 |
| Raymond Townsend |
director |
C/O KINDRED BIOSCIENCES, INC. 1555 BAYSHORE HIGHWAY, SUITE 200 BURLINGAME CA 94010 |
| Ervin Veszpremi |
director |
C/O KINDRED BIOSCIENCES, INC. 1555 BAYSHORE HIGHWAY, SUITE 200 BURLINGAME CA 94010 |
| Stephen Sundlof |
officer: SVP of Regulatory Affairs |
C/O KINDRED BIOSCIENCES, INC. 1555 BAYSHORE HIGHWAY, SUITE 200 BURLINGAME CA 94010 |
| Oleg Nodelman |
director |
357 TEHAMA STREET #3, SAN FRANCISCO CA 94103 |
| Selby Blake Hawley |
officer: Chief Commercial Officer |
C/O KINDRED BIOSCIENCES, INC. 1499 BAYSHORE HIGHWAY, SUITE 226 BURLINGAME CA 94010 |
| Stephen S Galliker |
officer: Chief Financial Officer |
300 TECHNOLOGY SQUARE, CAMBRIDGE MA 02139 |
| Kevin Schultz |
officer: Chief Scientific Officer |
C/O KINDRED BIOSCIENCES, INC. 1499 BAYSHORE HIGHWAY, SUITE 226 BURLINGAME CA 94010 |
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