MTST (MetaStat) Predictability Rank

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What is MetaStat 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.

MetaStat 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

MetaStat Predictability Rank Related Terms

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MetaStat Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » MetaStat Inc (OTCPK:MTST) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

27 Drydock Avenue, 2nd Floor, Boston, MA, USA, 02210

Website

http://www.metastat.com

MetaStat Inc is a US-based biotechnology company which focuses on discovering and developing personalized therapeutic (Rx) and diagnostic (Dx) treatment solutions for cancer patients. The company focuses on development programs of the novel therapeutic product candidates that target the Mena protein isoform whereas the Companion Diagnostics program is focused on developing companion tests to be used in combination with cancer drugs, that provide essential information for the safe and effective use of a corresponding drug or biological product to improve patient outcome. It also develops a prognostic diagnostic program which is focused on developing diagnostic tests that predict the risk of future metastasis in cancer patients following the initial treatment of their primary tumor.

Executives

Daniel H Schneiderman	officer: VP OF FINANCE AND SECRETARY	760 PARKSIDE AVE. SUITE 304, SUITE 207, BROOKLYN NY 11226
Jerome B Zeldis	director	8767 E. VIA DE VENTURA, SUITE 190, SCOTTSDALE AZ 85258
Paul Billings	director	11055 FLINTKOTE AVENUE, SUITE B, SAN DIEGO CA 92121
Richard J Berman	director	305 COLLEGE ROAD EAST, PRINCETON NJ 08540
Martin J Driscoll	director	C/O JAVELIN PHARMACEUTICALS, INC., 125 CAMBRIDGE PARK DRIVE, CAMBRIDGE MA 02140
Oscar Bronsther	director	4 AUTUMNWOOD COURT, THE WOODLANDS TX 77380
Johan M. Spoor	director	500 BOYLSTON STREET, SUITE 1600, BOSTON MA 02116
David N Siegel	director	T-S CAPITAL PARTNERS, LLC, 1350 TREAT BOULEVARD, SUITE 400, WALNUT CREEK CA 94597
Warren C Lau	director	2635 N. CRESCENT RIDGE DRIVE, THE WOODLANDS TX 77381
Patrick T Mooney	director	C/O SONTRA MEDICAL CORPORATION, 10 FORGE PARKWAY, FRANKLIN MA 02038
David M. Epstein	director	OSI PHARMACEUTICALS, INC., 41 PINELAWN ROAD, MELVILLE NY 11747
Richard W Perkins	10 percent owner	730 EAST LAKE STREET, WAYZATA MN 55391
Harvey Judkowitz	director	10220 SW 124 ST, MIAMI FL 33176

MetaStat Headlines

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