TMC (TMC The Metals Co) Predictability Rank

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What is TMC The Metals Co 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.

TMC The Metals Co 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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TMC The Metals Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » TMC The Metals Co Inc (NAS:TMC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

1111 West Hastings Street, 15th Floor, Vancouver, BC, CAN, V6E 2J3

Website

https://www.metals.co

TMC The Metals Co Inc is a deep-sea minerals exploration company focused on the collection, processing, and refining of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone (CCZ). Polymetallic nodules are discrete rocks that sit unattached to the seafloor, occur in notable quantities in the CCZ, and have high concentrations of nickel, copper, cobalt, and manganese in a single rock. The company believes these four metals contained in the polymetallic nodules are critical for energy infrastructure and industrial manufacturing. The Company's business consists of only one operating segment, namely exploration of seafloor polymetallic nodules, which includes the development of a metallurgical process to treat such seafloor polymetallic nodules.

Executives

Anthony O'sullivan	officer: Chief Development Officer	19 TENNYSON STREET, BULIMBA, QUEENSLAND C3 4171
Craig Shesky	officer: Chief Financial Officer	570 BROOME STREET, APT. 13A, NEW YORK NY 10013
Erika Ilves	officer: Head of Strategy & Bus. Devt.	APT. 6403, JADDAF WATERFRONT TOWER D1, DUBAI C0 00000
Andrew Hall	director	16 BARONSFIELD ROAD, TWICKENHAM X0 TW1 2QU
Gregory Stone	officer: Chief Ocean Scientist	17350 SUNSET BLVD., 502, PACIFIC PALISADES CA 90272
Allseas Group S.a.	10 percent owner	18 ROUTE DE PRA DE PLAN, CASE POSTALE 411, CHATEL-SAINT-DENIS V8 1618
Andrei Karkar	director, 10 percent owner	323 MARINA BOULEVARD, SAN FRANCISCO CA 94123
Gerard Barron	director, officer: Chief Executive Officer	APT. 6403, JADDAF WATERFRONT TOWER D1, DUBAI C0 00000
Argentum Cedit Virtuti Gcv	10 percent owner	WIEGSTRAAT 21, ANTWERPEN C9 2000
Stichting Administratiekantoor Aequa Lance Foundation	10 percent owner	C/O ALLSEAS GROUP S.A., 18 ROUTE DE PRA DE PLAN, CHATEL-SAINT-DENIS V8 1618
Edward Heerema	10 percent owner	C/O ALLSEAS GROUP S.A., 18 ROUTE DE PRA DE PLAN, CHATEL-SAINT-DENIS V8 1618
Allseas Investments S.a.	10 percent owner	18 ROUTE DE PRA DE PLAN, CHATEL-SAINT-DENIS V8 1618
Andrew Carlyle Greig	director	1 MACQUARIE ST, TENERIFFE, QLD C3 4005
Christian Madsbjerg	director	36 WEST 13TH STREET, NEW YORK NY 10011
Amelia Kinahoi Siamomua	director	3575 BEACHHILL DRIVE, ATLANTA GA 30340