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TRVN (Trevena) Predictability Rank


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What is Trevena Predictability Rank?

1 (5)

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.


Trevena 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Trevena Predictability Rank Related Terms

Thank you for viewing the detailed overview of Trevena's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.


Trevena Business Description

Traded in Other Exchanges
N/A
Address
955 Chesterbrook Boulevard, Suite 110, Chesterbrook, PA, USA, 19087
Trevena Inc is an American biopharmaceutical company focused on developing and commercializing novel medicines for patients affected by central nervous system, or CNS, disorders.
Executives
Mark Corrigan director
Mark Demitrack officer: SVP, Chief Medical Officer 955 CHESTERBROOK BOULEVARD, SUITE 200, CHESTERBROOK PA 19087
Robert T Yoder officer: SVP, Chief Business Officer 955 CHESTERBROOK BOULEVARD, SUITE 110, SUITE 200, CHESTERBROOK PA 19087
Carrie L. Bourdow director, officer: President & CEO C/O TREVENA, INC., 1018 WEST 8TH AVENUE, SUITE A, KING OF PRUSSIA PA 19406
Patricia M. Drake officer: SVP, Chief Commercial Officer 245 FIRST STREET, SUITE 1800, CAMBRIDGE MA 02142
Barry Shin officer: SVP, CFO C/O TREVENA, INC., 955 CHESTERBROOK BLVD, SUITE 110, CHESTERBROOK PA 19087
Marvin Johnson director C/O TREVENA, INC., 955 CHESTERBROOK BOULEVARD, STE. 110, CHESTERBROOK PA 19087
Barbara Yanni director 1018 W. 8TH AVENUE, SUITE A, KING OF PRUSSIA PA 19406
Moulder Leon O Jr director C/O TESARO, INC., 1000 WINTER STREET, SUITE 3300, WALTHAM MA 02451
Jason Raleigh Nunn director 1119 ST. PAUL STREET, BALTIMORE MD 21202
Scott Braunstein director C/O ESPERION THERAPEUTICS, INC., 3891 RANCHERO DRIVE, SUITE 150, ANN ARBOR MI 48108
Michael R Dougherty director C/O ADOLOR CORP, 700 PENNSYLVANIA DR, EXTON PA 19341
Anne M. Phillips director C/O TREVENA, INC., 1018 WEST 8TH AVENUE, KING OF PRUSSIA PA 19406
Scott Applebaum officer: CLCO; SVP, Regulatory Affairs C/O TREVENA INC., 955 CHESTERBROOK BOULEVARD, SUITE 110, CHESTERBROOK PA 19087
John P. Hamill officer: Int. Prin. Fin. Off. and PAO 4092 NEW HOPE ROAD, FURLONG PA 18925

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