Medpace Holdings (Medpace Holdings) Predictability Rank

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What is Medpace Holdings 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.

Medpace Holdings 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

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Medpace Holdings (Medpace Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Diagnostics & Research » Medpace Holdings Inc (NAS:MEDP) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

MEDP:Mexico 01P:Germany

Address

5375 Medpace Way, Cincinnati, OH, USA, 45227

Website

https://www.medpace.com

Medpace is a late-stage contract research organization, or CRO, that provides full-service drug development and clinical trial services to small and midsized biotechnology, pharmaceutical, and medical device firms. Medpace also offers ancillary services such as bio-analytical laboratory services and imaging capabilities. The company was founded over 30 years ago, and it has over 5,400 employees across 40 countries. Medpace is headquartered in Cincinnati, Ohio, and its operations are principally based in the U.S., but it also operates in Europe, Asia, South America, Africa, and Australia. Cinven, a global private equity firm, acquired Medpace for $915 million in February 2014, and it exited Medpace in August 2018.

Executives

Susan E Burwig	officer: Exec. VP, Operations	C/O MEDPACE HOLDINGS, INC., 5375 MEDPACE WAY, CINCINNATI OH 45227
August J. Troendle	director, 10 percent owner, officer: CEO	5375 MEDPACE WAY, CINCINNATI OH 45227
Medpace Investors, Llc	10 percent owner	4620 WESLEY AVENUE, CINCINNATI OH 45212
Robert O. Kraft	director	ONE CVS DRIVE, WOONSOCKET RI 02895
Kevin M. Brady	officer: CFO & Treasurer	MEDPACE HOLDINGS, INC., 5375 MEDPACE WAY, CINCINNATI OH 45227
Stephen P Ewald	officer: General Counsel & Corp. Secy.	C/O MEDPACE HOLDINGS,INC., 5375 MEDPACE WAY, CINTINNATI OH 45227
Femida H. Gwadry-sridhar	director	5375 MEDPACE WAY, CINCINNATI OH 45227
Ashley M. Keating	director	5375 MEDPACE WAY, CINCINNATI OH 45227
Davenport Fred B Jr	director
Brian T Carley	director	C/O MEDPACE HOLDINGS, INC., 5375 MEDPACE WAY, CINCINNATI OH 45227
Mccarthy Cornelius P. Iii	director	5375 MEDPACE WAY, CINCINNATI OH 45227
Jesse J Geiger	officer: CFO & COO, Lab Operations	C/O MEDPACE HOLDINGS, INC., 5375 MEDPACE WAY, CINCINNATI OH 45227
Tom C King	director	5375 MEDPACE WAY, CINCINNATI OH 45227
Medpace Limited Partnership	10 percent owner	EAST WING, TRAFALGAR COURT, LES BANQUES, ST. PETER PORT, CHANNEL ISLANDS Y7 GY1 3PP
Cinven Capital Management (v) General Partner Ltd	10 percent owner	EAST WING, TRAFALGAR COURT, LES BANQUES, ST. PETER PORT Y7 GY1 3PP