What is Trillion Energy International Predictability Rank?
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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.
Trillion Energy International 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
Also read:
Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety
Trillion Energy International Business Description
Traded in Other Exchanges
Address
838 West Hastings Street, Suite 700, Vancouver, BC, CAN, V6C 0A6
Trillion Energy International Inc is an oil and gas-producing company with multiple assets throughout Turkey and Bulgaria. The company is 49% owner of the SASB natural gas field, one of the Black Sea's first natural gas development projects; a 19.6% (except three wells with 9.8%) ownership interest in the Cendere oil field; and Bulgaria, the Vranino 1-11 block, a prospective unconventional natural gas property. The company has three operating segments; North America, Turkey, and Bulgaria. It derives a majority of its revenue from Turkey.
Executives
| David Michael Thompson |
director, 10 percent owner, officer: Chief Financial Officer |
300,400 - 5TH AVENUE SW, CALGARY A0 T2P 0L6 |
| Wood Barry G.m. |
director, 10 percent owner |
1221 HIGHWAY 341, UPPER CANARD A5 B0P 1J0 |
| Kubilay Yildirim |
director |
TURAN GUNES BULVARI PARK ORAN OFIS PLAZA, 180-Y NO:54 KAT:16 ORAN CANKAYA, ANKARA W8 06450 |
| Parvez Nadeem Tyab |
10 percent owner |
2901-838 WEST HASTINGS STREET, VANCOUVER A1 V6C 0A6 |
| Aura Oil Holdings Ltd. |
10 percent owner |
THE CONTINENTAL BUILDING, 2ND FLOOR, 25 CHURCH STREET, HAMILTON D0 HM12 |
| Arthur Halleran |
director, officer: President |
#5 - COVENTRY HILLS DR, N.E., CALGARY A0 P3K 5W2 |
| David S. Campbell |
officer: Vice President of Exploration |
300,400 - 5TH AVENUE SW, CALGARY A0 T2P 0L6 |
| Charles Michel |
officer: Chief Financial Officer |
2200 ROSS AVE, SUITE 4500E, DALLAS TX 75201 |
| Mohammad Ijaz Khan |
director |
300, 400 - 5TH AVENUE SW, CALGARY A0 T2P 0L6 |
| Francis M. Munchinski |
officer: Secretary & Treasurer |
2200 ROSS AVE, SUITE 4500E, DALLAS TX 75201 |
| Scott C Larsen |
director, officer: President and CEO |
5910 N. CENTRAL EXPRESSWAY, SUITE 1755, DALLAS TX 75206 |
| Century House Holdings Ltd. |
10 percent owner |
THE CONTINENTAL BUILDING, 2ND FLOOR, 25 CHURCH STREET, HAMILTON D0 HM12 |
| Tatiana Kovaleva |
officer: Treasurer |
300, 400 - 5TH AVENUE SW CALGARY A0 T2P 0L6 |
| Taisiia Popova |
officer: Chief Financial Officer |
300, 400 - 5TH AVENUE SW CALGARY A0 T2P 0L6 |
| David Roy Johnson |
director, officer: President & CEO |
1220-666 BURRARD STREET VANCOUVER A1 V6E 4N7 |
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