Electrameccanica Vehicles (Electrameccanica Vehicles) Predictability Rank

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What is Electrameccanica Vehicles 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.

Electrameccanica Vehicles 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

Electrameccanica Vehicles Predictability Rank Related Terms

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Electrameccanica Vehicles (Electrameccanica Vehicles) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Electrameccanica Vehicles Corp Ltd (NAS:SOLO) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

8057 North Fraser Way, Burnaby, BC, CAN, V5J 5M8

Website

https://www.electrameccanica.com

Electrameccanica Vehicles Corp Ltd is a development-stage electric vehicle or EV, designer and manufacturer company. The company's product line targets urban commuters, commercial fleets/deliveries and shared mobility seeking to commute in an efficient, cost-effective and environmentally friendly manner. The company's first flagship EV is the SOLO, a single-seat vehicle, of which it has built 64 prototype vehicles in-house and 60 pre-production vehicles with its manufacturing partner, Zongshen. The company's reportable business segments include Electric Vehicles which is the development and manufacture of electric vehicles for mass markets, and Custom built vehicles which is the development and manufacture of high-end custom-built vehicles.

Executives

Jerry Kroll	director	2108-808 NELSON ST, VANCOUVER BC A1 V6Z 2H2
Stephen Eric Johnston	officer: Chief Financial Officer	4950 SUSANS WAY, BLOOMFIELD HILLS MI 48302
Luisa Ingargiola	director	4826 BLUE JAY CIRCLE, PALM HARBOR FL 34683
Steven Andrew Sanders	director	431 EAST 20TH STREET, NEW YORK NY 10010
Yan Fang Qiong Joanne	director	504 - 1355 BELLEVUE AVE, WEST VANCOUVER A1 V7T 0B4
David John Shemmans	director	NUTSHELL, FIR TREE LANE, WEST CHILTINGTON, WEST SUSSEX X0 RH20 2RA
G Michael Bridge	officer: General Counsel & Corp. Sec.	14400 N 87TH ST, SCOTTSDALE AZ 85260
Quigley William G Iii	director
Susan E Docherty	director, officer: CEO and COO	THE BRINK'S COMPANY, 1801 BAYBERRY COURT, 4TH FLOOR, RICHMOND VA 23226
Kim A. Brink	officer: Chief Revenue Officer	C/O 505 NORTH HIGHWAY 169, SUITE 1000, PLYMOUTH MN 55441
Michael Paul Richardson	director	13715 OASIS TERRACE, LAKEWOOD RANCH FL 34202
Dietmar Ostermann	director	5400 LEGACY DR, H3 3E 35, PLANO TX 75024
Mark Orsmond	officer: Chief Financial Officer	992 HAMPSHIRE RD, NORTH VANCOUVER A1 V7R1V2