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Veru (VERU) Predictability Rank


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What is Veru 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.


Veru 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

Veru Predictability Rank Related Terms

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


Veru Business Description

Traded in Other Exchanges
Address
2916 North Miami Avenue, Suite 1000, Miami, FL, USA, 33127
Veru Inc is a biopharmaceutical company with a drug development program for the treatment of metabolic diseases, oncology, and acute respiratory distress syndrome (ARDS). The company is also in the late-stage development of certain drugs for the management of breast and prostate cancers. It also has a sexual health program that includes two products, ENTADFI, for the treatment of benign prostatic hyperplasia (BPH) and the FC2 Female Condom (Internal Condom). The company operates in a single segment and generates revenue from the USA which is the key revenue generating market, Brazil, and other regions.
Executives
Michael L Rankowitz director 2500 LAKE COOK ROAD, RIVERWOODS IL 60015
K Gary Barnette officer: Chief Scientific Officer 4400 BISCAYNE BOULEVARD, SUITE 888, MIAMI FL 33137
Mitchell Shuster Steiner director, 10 percent owner, officer: President and CEO 175 TOYOTA PLAZA, 7TH FLOOR, MEMPHIS TN 38103
Harry Fisch director, 10 percent owner 515 N. STATE STREET, SUITE 2225, C/O THE FEMALE HEALTH COMPANY, CHICAGO IL 60654
Mario Eisenberger director 515 N. STATE STREET, SUITE 2225, C/O THE FEMALE HEALTH COMPANY, CHICAGO IL 60654
Lucy Lu director THE FEMALE HEALTH COMPANY, 4400 BISCAYNE BOULEVARD, SUITE 888, MIAMI FL 33137
Grace Hyun director 48 NW 25TH STREET, SUITE 102, MIAMI FL 33127
Michele Greco officer: VP and CFO 515 NORTH STATE STREET, SUITE 2225, CHICAGO IL 60654
Jesus Socorro director 4400 BISCAYNE BOULEVARD, SUITE 888, MIAMI FL 33137
Todd Charles T Jr officer: CEO of FHC Division 4400 BISCAYNE BOULEVARD, SUITE 888, MIAMI FL 33137
Robert Getzenberg officer: Chief Scientific Officer 4400 BISCAYNE BOULEVARD, SUITE 888, MIAMI FL 33137
Elgar Peerschke director 515 N. STATE STREET, SUITE 2225, C/O THE FEMALE HEALTH COMPANY, CHICAGO IL 60654
Daniel Haines officer: CFO and COO 515 N. STATE STREET, SUITE 2225, C/O THE FEMALE HEALTH COMPANY, CHICAGO IL 60654
David R Bethune director THE FEMALE HEALTH COMPANY, 515 NORTH STATE STREET, SUITE 2225, CHICAGO IL 60610
O B Parrish director, officer: Chairman/Chief Exec. Officer