California Bancorp (California Bancorp) Predictability Rank

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What is California Bancorp 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.

California Bancorp 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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California Bancorp (California Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » California Bancorp (NAS:CALB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

3SB:Germany

Address

1300 Clay Street, Suite 500, Oakland, CA, USA, 94612

Website

https://www.californiabankofcommerce.com

California Bancorp is a holding company for California Bank of Commerce. The company primarily serves business and professional corporations with a variety of business-focused financial services. Some of the products and services that the bank offers include commercial checking, savings and money market accounts, certificates of deposit, treasury and cash management services, foreign exchange services, commercial and industrial loans, asset-based loans, loans to dental and veterinary professionals, commercial real estate loans, residential and commercial construction and development loans, online banking, and mobile banking. Most of the company's business activity is with customers located within the San Francisco Bay Area counties.

Executives

Wayne S. Doiguchi	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Kevin Joseph Cullen	director	AVEO PHARMACEUTICALS, INC., 30 WINTER STREET, BOSTON MA 02108
Thomas A Sa	officer: See Remarks	55 ALMADEN BLVD, SAN JOSE CA 95113
Theodore A. Wilm	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Andrew J. Armanino	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Thomas M. Dorrance	officer: Chief Technology Officer	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Steven E. Shelton	director, officer: See Remarks	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Stephen A. Cortese	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Michelle Wirfel	officer: SEVP and Chief Banking Officer	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Millicent C. Tracey	director	1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Julie Levenson	director	C/O GRAF INDUSTRIAL CORP., 118 VINTAGE PARK BLVD., SUITE W-22, HOUSTON TX 77070
Kevin J. Cullen	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Rochelle G. Klein	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Stephen R. Dathe	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612
Donald Kintzer	director	C/O CALIFORNIA BANCORP, 1300 CLAY STREET, FIFTH FLOOR, OAKLAND CA 94612