Howard Hughes Holdings (Howard Hughes Holdings) Predictability Rank

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What is Howard Hughes Holdings 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.

Howard Hughes 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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Howard Hughes Holdings (Howard Hughes Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Howard Hughes Holdings Inc (NYSE:HHH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

HHE0:Germany

Address

9950 Woodloch Forest Drive, Suite 1100, 11th Floor, The Woodlands, TX, USA, 77380

Website

https://www.howardhughes.com

Howard Hughes Holdings Inc owns, manages, and develops commercial, residential, and mixed-use real estate throughout the USA. Its portfolio is strategically positioned to meet and accelerate development based on market demand, resulting in one of the strongest real estate platforms in the country.

Executives

Douglas Johnstone	officer: Regional President, Hawaii	ONE GALLERIA TOWER, 13355 NOEL ROAD, 22ND FOOR, DALLAS TX 75240
Pershing Square Capital Management, L.p.	director, 10 percent owner	787 11TH AVENUE, 9TH FLOOR, NEW YORK NY 10019
Zachary Winick	officer: CO-PRESIDENT, NEW YORK REGION	C/O THE HOWARD HUGHES CORPORATION, 199 WATER STREET, 28TH FLOOR, NEW YORK NY 10038
Elena Verbinskaya	officer: Chief Accounting Officer	C/O IPSCO TUBULARS INC., 10120 HOUSTON OAKS DRIVE, HOUSTON TX 77064
Kristi Smith	officer: President, Columbia	9950 WOODLOCH FOREST DRIVE, SUITE 1100, THE WOODLANDS TX 77380
William A Ackman	director, 10 percent owner	787 - 11TH AVENUE, 9TH FLOOR, NEW YORK NY 10019
Ps Management Gp, Llc	director, 10 percent owner	787 - 11TH AVENUE, 9TH FLOOR, NEW YORK NY 10019
Frank Stephan	officer: PRESIDENT, NEVADA	9950 WOODLOCH FOREST DRIVE, SUITE 1100, THE WOODLANDS TX 77380
Anthony Williams	director	9950 WOODLOCH FOREST DRIVE, SUITE 1100, THE WOODLANDS TX 77380
David Eun	director	9950 WOODLOCH FOREST DRIVE, SUITE 1100, THE WOODLANDS TX 77380
David Michael Striph	officer: EVP, Head of Operations	ONE GALLERIA TOWER, 13355 NOEL ROAD, 22ND FLOOR, DALLAS TX 75240
Andrew Schwartz	officer: CO-PRESIDENT, NEW YORK REGION	C/O THE HOWARD HUGHES CORPORATION, 199 WATER STREET, 28TH FLOOR, NEW YORK NY 10038
Heath Melton	officer: PRESIDENT, PHOENIX REGION	9950 WOODLOCH FOREST DRIVE, SUITE 1100, THE WOODLANDS TX 77381
Carlos A. Olea	officer: CHIEF FINANCIAL OFFICER	9950 WOODLOCH FOREST DRIVE, SUITE 1100, THE WOODLANDS TX 77381
L Jay Cross	officer: President	233 SOUTH WACKER DRIVE, SUITE 4600, CHICAGO IL 60606