Sobrfe (Sobrfe) Predictability Rank

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What is Sobrfe 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.

Sobrfe 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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Sobrfe (Sobrfe) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Sobr Safe Inc (NAS:SOBR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

Z6S0:Germany Z6S0:Germany

Address

6400 South Fiddlers Green Circle, Suite 525, Greenwood Village, CO, USA, 80111

Website

https://www.sobrsafe.com

Sobr Safe Inc is engaged in developing alcohol-detecting devices to address the automotive alcohol sensing spectrum. The company has developed an alcohol detection device called SOBR. This device is patented and is used for detecting alcohol in a human system by testing the ethanol content in the perspiration. The company generates revenue through various combinations of software products and services which include the sale of cloud-based software solutions, detection and data collection hardware devices, and cloud-based data reporting and analysis services.

Executives

J. Steven Beabout	director	C/O STARZ, 8900 LIBERTY CIRCLE, ENGLEWOOD CO 80112
Gerard Wenzel	officer: CFO	6400 SOUTH FIDDLERS GREEN CIRCLE, SUITE 525, GREENWOOD VILLAGE CO 80111
Sandy L Shoemaker	director	6400 SOUTH FIDDLERS GREEN CIRCLE, SUITE 525, GREENWOOD VILLAGE CO 80111
Michael T Watson	officer: CRO & EVP Sales and Marketing	6400 SOUTH FIDDLERS GREEN CIRCLE, SUITE 1400, GREENWOOD VILLAGE CO 80111
Charles Warren Bennington	director, officer: Chief Executive Officer	3030 OLD RANCH PARKWAY, SEAL BEACH CA 90740
Gary John Graham	director, 10 percent owner	6400 S. FIDDLERS GREEN CIRCLE, SUITE 525, GREENWOOD VILLAGE CO 80111
Ford Byron Fay	director	9879 CLAIRTON CT., HIGHLAND RANCH CO 80126
David Joseph Gandini	director, officer: Chief Revenue Officer	39 FALLON HILLS DRIVE, HIGHLANDS RANCH CO 80126
Kevin D Moore	director, officer: Chief Executive Officer	730 15TH STREET, BOULDER CO 80302
Michael A. Lanphere	10 percent owner, officer: V.P. of Legal Affairs	8 PLUMERIA, IRVINE CA 92620
Gadasalli Subramanya Satyanarayana	director, 10 percent owner	683 E. BROKAW RD., SAN JOSE CA 95112
Devadatt M Mishal	director	8500 FLORENCE AVE. E., DOWNEY CA 90241
Nicholas Limer	director, 10 percent owner, officer: Secretary	3030 OLD RANCH PARKWAY, SEAL BEACH CA 90740
Ronald Louis Williams	director, officer: Chief Technology Officer	3030 OLD RANCH PARKWAY, SEAL BEACH CA 90740
Munn Harlan B Iii	director	5758 SINGLETREE LANE, PARKER CO 80134