STKS (The One Group Hospitality) Predictability Rank

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What is The One Group Hospitality 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.

The One Group Hospitality 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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The One Group Hospitality Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » The One Group Hospitality Inc (NAS:STKS) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

XZ9:Germany

Address

1624 Market Street, Suite 311, Denver, CO, USA, 80202

Website

https://www.togrp.com

The One Group Hospitality Inc is a restaurant company that develops, owns and operates, manages and licenses upscale and polished casual, high-energy restaurants and lounges and provides turn-key food and beverage (F&B) services for hospitality venues, including hotels, casinos, and other high-end locations internationally. The company operates through four segments: STK, Kona Grill, ONE Hospitality, and Corporate. The company generates the vast majority of its revenue from the domestic market.

Executives

Jonathan Segal	director, officer: Director, Business Development	411 WEST 14TH STREET, NEW YORK NY 10014
Haydee Olinger	director	1628 NEWTON AVENUE, PARK RIDGE IL 60068
Eugene M Bullis	director	11825 N PENNSYLVANIA ST, CARMEL PA 46032
David Kanen	10 percent owner, other: Passive Investor	6429 NW 65TH WAY, PARKLAND FL 33067
Dimitrios Angelis	director	100 CANAL POINTE BLVD., SUITE 108, PRINCETON NJ 08540
Philotimo Focused Growth & Income Fund	other: See Explanation of Responses	5850 CORAL RIDGE DRIVE, SUITE 309, CORAL SPRINGS FL 33076
Emanuel N Hilario	director, officer: President and CEO	640 N LASALLE STREET, SUITE 295, CHICAGO IL 60610
Christi Hing	officer: Chief Accounting Officer	7150 E. CAMELBACK ROAD, SUITE 220, SCOTTSDALE AZ 85251
Susan Lintonsmith	director	9552 E. SILENT HILLS PLACE, LONE TREE CO 80124
Tyler Loy	officer: Chief Financial Officer	411 WEST 14TH STREET, NEW YORK NY 10014
Michael Serruya	director	C/O RESPONSE GENETICS, INC., 1640 MARENGO ST., 6TH FLOOR, LOS ANGELES CA 90033
Linda Siluk	officer: Chief Administrative Officer	C/O FAIRWAY GROUP HOLDINGS CORP., 2284 12TH AVENUE, NEW YORK NY 10027
Kanen Wealth Management Llc	10 percent owner, other: Passive Investor	5850 CORAL RIDGE DRIVE, SUITE 309, CORAL SPRINGS FL 33076
Philotimo Fund, Lp	10 percent owner, other: Passive Investor	5850 CORAL RIDGE DRIVE, SUITE 309, CORAL SPRINGS FL 33076
Kin Chan	director	UNIT 601-2, 6TH FLOOR, ST. GEORGE'S BUILDING, 2 ICE HOUSE ST., CENTRAL K3 00000