Lifeloc Technologies (Lifeloc Technologies) Predictability Rank

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What is Lifeloc Technologies 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.

Lifeloc Technologies 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

Lifeloc Technologies Predictability Rank Related Terms

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Lifeloc Technologies (Lifeloc Technologies) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Lifeloc Technologies Inc (OTCPK:LCTC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

12441 West 49th Avenue, Wheat Ridge, CO, USA, 80033

Website

https://www.lifeloc.com

Lifeloc Technologies Inc is a Colorado-based developer, manufacturer, and marketer of portable hand-held and fixed station breathalyzers and related accessories, supplies and education. It offers fuel-cell based breath alcohol testing equipment. In addition, it also offers a line of supplies, accessories, services, and training to support customers' alcohol testing programs. The company operates through two segments: Product Sales and Rentals. The Product Sales segment is a key revenue driver, includes the sale of physical products, including portable hand-held breathalyzers and related accessories and the Rentals segment includes rental of a portion of the company's building.

Executives

Wayne Willkomm	director	12441 W 49TH AVENUE, UNIT #4, WHEAT RIDGE CO 80033
Donald E. Siecke	director	12441 W 49TH AVE., UNIT 4, WHEAT RIDGE CO 80033
Michael Kornelsen	director	700 N. WASHINGTON STREET, #1007, DENVER CO 80203
Gurumurthi Ravishankar	director, officer: Executive Vice President	12441 W. 49TH STREET, SUITE 4, WHEAT RIDGE CO 80033
Vern D Kornelsen	director, 10 percent owner, officer: Secretary and CFO	4605 S. DENICE DR, ENGLEWOOD CO 80111
Partners Lllp Edco	10 percent owner	4605 S DENICE DR, ENGLEWOOD CO 80111
Robert D Greenlee	director	2060 BROADWAY, BOULDER CO 80302
Kristie L. Larose	officer: Vice President, Finance	12441 W. 49TH AVE., STE 4, WHEAT RIDGE CO 80033
Barry R. Knott	director, officer: President, CEO and Treasurer	12441 W. 49TH AVE., STE 4, WHEAT RIDGE CO 80033
Mark A. Lary	officer: Vice President, Operations	12441 W. 49TH AVE., STE 4, WHEAT RIDGE CO 80033
Robert H. Summers	director	5816 S LUPINE DR, LITTLETON CO 80123
Alan C. Castrodale	director	12441 . 49TH AVE., STE 4, WHEAT RIDGE CO 80033

Lifeloc Technologies (Lifeloc Technologies) Headlines

From GuruFocus

Lifeloc Reports Second Quarter 2023 Results

By ACCESSWIRE • 08-04-2023