PLBC (Plumas Bancorp) Predictability Rank

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What is Plumas Bancorp 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.

Plumas 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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Plumas Bancorp Business Description

Industry

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

Comparable Companies

Traded in Other Exchanges

N/A

Address

5525 Kietzke Lane, Suite 100, Reno, NV, USA, 89511

Website

https://www.plumasbank.com

Plumas Bancorp provides various banking products and services in Northeastern California and Northwestern Nevada. It provides various deposit products such as checking, interest-bearing checking, business sweep, public funds sweep, savings, time deposit, and retirement accounts. The bank's loan portfolio consists of commercial real estate loans; commercial and industrial loans; consumer loans; agricultural loans; residential real estate loans, and construction and land development loans. The bank generates revenue from loans and investment securities in its portfolio and, to a lesser extent, service fees.

Executives

Richard Francis Kenny	director	5555 FLOWERING SAGE TRAIL, RENO NV 89511
Richard L Belstock	officer: SVP, Interim CFO	35 S. LINDAN AVENUE, QUINCY CA 95971
Jeffrey T. Moore	officer: EVP and CCO	2293 BALD HILL ROAD, AUBURN CA 95603
Bj North	officer: EVP, Retail Banking Manager	35 S. LINDAN AVENUE, QUINCY CA 95971
Aaron M. Boigon	officer: EVP, Chief Information Officer	35 S. LINDAN AVE., QUINCY CA 95971
Michonne R. Ascuaga	director	695 JUNIPER HILL ROAD, RENO NV 89519-2929
Heidi S Gansert	director	4470 MOUNTAINGATE DRIVE, RENO NV 89519
Julie Ann Morehead	director	PO BOX 3745, YUBA CITY CA 95992
Steven M. Coldani	director	1806 W. KETTLEMAN LANE SUITE J, LODI CA 95242
William E Elliott	director, officer: President & CEO	C/O PLUMAS BANK, 35 S. LINDAN AVE, QUINCY CA 95971
Robert J Mcclintock	director	P.O. BOX 6179, 305 W. LAKE BLVD, TAHOE CITY CA 96145
Andrew J Ryback	officer: SVP, Controller	PLUMAS BANK, 35 S LINDAN AVE, QUINCY CA 95971
John Flournoy	director	P.O. BOX 96, LIKELY CA 96116-0096
Daniel E West	director	PO BOX 442, GRAEAGLE CA 96103
Cortopassi Family Trust	10 percent owner	11292 N ALPINE RD, STOCKTON CA 95212