ModivCare (ModivCare) Predictability Rank

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What is ModivCare 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.

ModivCare 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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ModivCare (ModivCare) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » ModivCare Inc (NAS:MODV) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

PRF0:Germany

Address

6900 Layton Avenue, 12th Floor, Denver, CO, USA, 80237

Website

https://www.modivcare.com

ModivCare Inc is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions for payors and their members. The company is also a provider of non-emergency medical transportation, or NEMT, personal care, and remote patient monitoring, or RPM, solutions, which serve similar, highly vulnerable patient populations. Its operating segment includes NEMT, Personal Care, and Remote Patient Monitoring. The company generates maximum revenue from the NEMT segment.

Executives

Barbara Gutierrez	officer: Chief Financial Officer	8950 E. LOWRY BLVD., DENVER CO 80230
L Heath Sampson	officer: Chief Financial Officer	C/O ADVANCED EMISSIONS SOLUTIONS, INC., 9135 S RIDGELINE BLVD STE 200, HIGHLANDS RANCH CO 80129
Coliseum Capital Management, Llc	director, 10 percent owner	105 ROWAYTON AVENUE, ROWAYTON CT 06853
Henry Toledo	officer: Chief People Officer	6900 LAYTON AVENUE, 12TH FLOOR, DENVER CO 80237
Jessica Kral	officer: Chief Information Officer	6900 LAYTON AVENUE, 12TH FLOOR, DENVER CO 80237
Anne E, Bailey	officer: President, Home Division	6900 LAYTON AVENUE, 12TH FLOOR, DENVER CO 80237
Rebecca Orcutt	officer: VP, Chief Accounting Officer	6900 LAYTON AVENUE, 12TH FLOOR, DENVER CO 80237
Brett M. Hickman	officer: Chief Commercial Officer	6900 LAYTON AVENUE, SUITE 1200, DENVER CO 80237
Ilias Simpson	officer: President, Transportation	6900 LAYTON AVENUE, SUITE 1200, DENVER CO 80237
Jason E Anderson	officer: President of ModivCare Home	6900 LAYTON AVENUE, SUITE 1200, DENVER CO 80237
Grover Wray	officer: Chief Human Resources Officer	DIGITALGLOBE, INC., 1300 WEST 120TH AVENUE, WESTMINSTER CO 80234
Daniel E Greenleaf	director, officer: CEO and President	C/O NABI BIO PHARMACEUTICALS, 5800 PARK OF COMMERCE BLVD., N.W., BOCA RATON FL 33487
Jonathan B Bush	officer: SVP, GC and Secretary	6900 LAYTON AVENUE, 12TH FLOOR, DENVER CO 80237
Kenneth Shepard	officer: Vice President, CAO	6900 LAYTON AVENUE, 12TH FLOOR, DENVER CO 80237
Stacy Saal	director	4700 SOUTH SYRACUSE STREET, 4TH FLOOR, DENVER CO 80237