LQDA (Liquidia) Predictability Rank

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What is Liquidia 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.

Liquidia 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

Liquidia Predictability Rank Related Terms

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Liquidia Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Liquidia Corp (NAS:LQDA) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

LT4:Germany

Address

419 Davis Drive, Suite 100, Morrisville, NC, USA, 27560

Website

https://www.liquidia.com

Liquidia Corp is a United States-based biopharmaceutical company focused on the development, manufacturing, and commercialization of products that address unmet patient needs, with the current focus directed towards the treatment of pulmonary hypertension (PH) and pulmonary hypertension associated with interstitial lung disease. It conducts research, development, and manufacturing of novel products by applying its proprietary PRINT technology, a particle engineering platform, to enable the precise production of uniform drug particles. Its product includes YUTREPIA (treprostinil) inhalation powder, for the treatment of pulmonary arterial hypertension. The company also generates revenue from the sale of Treprostinil Injection through an agreement between its subsidiary and the manufacturer.

Executives

Jason Adair	officer: V.P. Crp Dvlpmnt and Strtgy	C/O LIQUIDIA TECHNOLOGIES, INC., 419 DAVIS DRIVE, SUITE 100, MORRISVILLE NC 27560
Rajeev Saggar	officer: Chief Medical Officer	419 DAVIS DRIVE, SUITE 100, MORRISVILLE NC 27560
Scott Moomaw	officer: SVP, Commercial	P.O. BOX 110085, RESEARCH TRIANGLE PARK NC 27709
Michael Kaseta	officer: Chief Financial Officer	7100 WEST CREDIT AVENUE, SUITE 101, MISSISSAUGA A6 L5N OE4
Russell Schundler	officer: General Counsel	P.O. BOX 110085, RESEARCH TRIANGLE PARK NC 27709
Roger Jeffs	director
Paul B Manning	director, 10 percent owner	200 GARRETT STREET SUITE S, CHARLOTTESVILLE VA 22902
Caligan Partners Lp	director, 10 percent owner, other: See Remarks	515 MADISON AVENUE, 8TH FLOOR, NEW YORK NY 10022
Robert A Lippe	officer: Chief Operations Officer	C/O ALEXZA PHARMACEUTICALS, INC., 2091 STIERLIN COURT, MOUNTAIN VIEW CA 94043
Arthur S Kirsch	director	7100 WEST CREDIT AVENUE, SUITE 101, C/O ARALEZ PHARMACEUTICALS INC., MISSISSAUGA A6 L5N 0E4
David Edward Johnson	10 percent owner	590 MADISON AVENUE, NEW YORK NY 10022
Raman Singh	director	C/O LIQUIDIA TECHNOLOGIES, INC., 419 DAVIS DRIVE, SUITE 100, MORRISVILLE NC 27560
Katherine Rielly-gauvin	director	419 DAVIS DRIVE, MORRISVILLE NC 27560
Stephen M Bloch	director	285 RIVERSIDE AVENUE, SUITE 250, WESTPORT CT 06880
Joanna Horobin	director	215 FIRST STREET, SUITE 440, CAMBRIDGE MA 02142