MDU (MDU Resources Group) Predictability Rank

View and export this data going back to 1948. Start your Free Trial

What is MDU Resources Group 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.

MDU Resources Group 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

MDU Resources Group Predictability Rank Related Terms

Thank you for viewing the detailed overview of MDU Resources Group's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

MDU Resources Group Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Conglomerates » MDU Resources Group Inc (NYSE:MDU) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

MRE:Germany

Address

1200 West Century Avenue, P.O. Box 5650, Bismarck, ND, USA, 58506-5650

Website

https://www.mdu.com

MDU Resources Group Inc operates in five business segments, which includes: Electric segment, which generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming; The natural gas distribution segment distributes natural gas in those states, as well as in Idaho, Minnesota, Oregon and Washington; The pipeline segment provides natural gas transportation and underground storage services through a regulated pipeline system in the Rocky Mountain and northern Great Plains regions of the United States; The construction services segment provides a full spectrum of construction services through its electrical and mechanical and transmission and distribution specialty contracting services.

Executives

Rob L. Johnson	officer: President-WBI Holdings	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Dale Rosenthal	director	101 CONSTITUTION AVENUE, NW, WASHINGTON DC 20080
Paul R. Sanderson	officer: VP, CLO & Secretary	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
James H. Gemmel	director	C/O CORVEX MANAGEMENT LP, 667 MADISON AVENUE, NEW YORK NY 10065
Brian R. Gray	officer: President & CEO-Knife River	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
German Carmona-alvarez	director	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Thomas S Everist	director
Nicole A Kivisto	officer: Controller	P. O. BOX 5650, BISMARCK ND 58506-5650
Karl A Liepitz	officer: VP, Gen Counsel & Secretary	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Jason L Vollmer	officer: Treasurer & Director of Cash	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
David M Sparby	director	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Margaret A Link	officer: Chief Information Officer	1200 WEST CENTURY AVENUE, BISMARCK ND 58503
Dennis W Johnson	director	TMI BUSINESS DESIGHNS CORP, 50 3 AVENUE WAY, DICKINSON ND 58601
David C Barney	officer: President & CEO - Knife River	1150 WEST CENTURY AVENUE, BISMARCK ND 58503
Stephanie A Barth	officer: VP, CAO & Controller	1200 WEST CENTURY AVENUE, BISMARCK ND 58503