REXR (Rexford Industrial Realty) Predictability Rank

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What is Rexford Industrial Realty 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.

Rexford Industrial Realty 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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Rexford Industrial Realty Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Rexford Industrial Realty Inc (NYSE:REXR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

REXRpC.PFD:USA REXRpB.PFD:USA 3I0:Germany

Address

11620 Wilshire Boulevard, Suite 1000, Los Angeles, CA, USA, 90025

Website

https://www.rexfordindustrial.com

Rexford Industrial Realty Inc is a real estate investment trust engaged in owning, operating, and acquiring industrial properties in Southern California infill markets. The goal is to generate attractive risk-adjusted returns for stockholders by providing superior access to industrial property investments in Southern California infill markets. It has one operating segment business of investing in, operating, and repositioning/redeveloping industrial real estate properties located in Southern California infill markets.

Executives

Laura E Clark	officer: Chief Financial Officer	11620 WILSHIRE BOULEVARD, SUITE 1000, LOS ANGELES CA 90025
Howard Schwimmer	director, officer: Co-CEO, Co-President	11620 WILSHIRE BOULEVARD, SUITE 300, LOS ANGELES CA 90025
David E. Lanzer	officer: General Counsel	11620 WILSHIRE BLVD, SUITE 1000, LOS ANGELES CA 90025
Angela L. Kleiman	director	1100 PARK PLACE, SUITE 200, SAN MATEO CA 94403
Michael S. Frankel	director, officer: Co-CEO	11620 WILSHIRE BOULEVARD, SUITE 300, LOS ANGELES CA 90025
Debra L Morris	director	11620 WILSHIRE BOULEVARD, SUITE 1000, LOS ANGELES CA 90025
Richard S Ziman	director	C/O AVP ADVISORS INC., 10940 WILSHIRE BLVD., STE. 1950, LOS ANGELES CA 90024
Adeel Khan	officer: Chief Financial Officer	11620 WILSHIRE BOULEVARD, SUITE 300, LOS ANGELES CA 90025
Steven C Good	director	11755 WILSHIRE BOULEVARD, SUITE 1700, LOS ANGELES CA 90025
Diana J Ingram	director	11620 WILSHIRE BOULEVARD, SUITE 1000, LOS ANGELES CA 90025
Tyler H Rose	director	12200 W OLYMPIC BLVD, SUITE 200, LOS ANGELES CA 90064
Peter E Schwab	director	C/O TENNENBAUM CAPITAL PARTNERS, LLC, 2951 28TH STREET, SUITE 1000, SANTA MONICA CA 90405
Jonathan Abrams	officer: General Counsel	355 SOUTH GRAND AVENUE, SUITE 3300, LOS ANGELES CA 90071
Joel S Marcus	director	C/O ALEXANDRIA REAL ESTATE EQUITIES, INC, 26 NORTH EUCLID AVENUE, PASADENA CA 91101
Leslie E Bider	director	1299 OCEAN AVENUE, SUITE 1000, SANTA MONICA CA 90401