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Peak Bio (Peak Bio) Predictability Rank


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What is Peak Bio 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.

Peak Bio 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Also read:

Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

Peak Bio Predictability Rank Related Terms

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Peak Bio (Peak Bio) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Peak Bio Inc (OTCPK:PKBO) » Definitions » Predictability Rank
Comparable Companies
NBRVF BXRX AMPE ADTX DRMA SCPS RUBY INM GLMD RVLPQ OCSE:NOVO B VRTX REGN ASX:CSL SGEN XKRX:207940 MRNA XBRU:ARGX HKSE:02269 BNTX
Traded in Other Exchanges
N/A
Address
4900 Hopyard Road, Suite 100, Pleasanton, CA, USA, 94588
Website
https://www.peak-bio.com
Peak Bio Inc is a clinical-stage biopharmaceutical company focused on developing therapeutics addressing unmet needs in the areas of oncology and inflammation.
Executives
Hoyoung Huh director C/O NEKTAR THERAPEUTICS, 201 INDUSTRIAL ROAD, SAN CARLOS CA 94070
Michael R. Friedman director 245 E. 58TH STREET, APT #15B, NEW YORK NY 10022
Peter David Mccabe officer: General Counsel 584 CASTRO STREET, #882, SAN FRANCISCO CA 94114
Sbi Kis 2016-1 Fund 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO GANGNAM, SEOUL M5 00000
2014 Kif-sbi It Investment Fund 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
2019 Sbi Job Creation Fund 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
Sbi Investment Korea Co., Ltd. 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
Sbi Healthcare Fund I 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
Sbi Cross-border Advantage Fund 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
Bio Fund 1 Ikbc-sbi 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
Gateway Fund 1 Global 10 percent owner 14TH FL., NC TOWER, 509, TEHERAN-RO, GANGNAM, SEOUL M5 00000
Nevan C Elam director C/O NEKTAR THERAPEUTICS, 150 INDUSTRIAL ROAD, SAN CARLOS CA 94070
Satyajit Kumar Mitra officer: See Remarks 3350 W BAYSHORE ROAD, SUITE 100, PALO ALTO CA 94303
Stephen J Lamond director, officer: See Remarks 3350 W BAYSHORE ROAD, SUITE 100, PALO ALTO CA 94303
David I. Rosenberg director C/O IGNYTE ACQUISITION CORP., 640 5TH AVENUE, 4TH FLOOR, NEW YORK NY 10019