What is Verde Clean Fuels 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.
Verde Clean Fuels 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
Verde Clean Fuels Business Description
Traded in Other Exchanges
N/A
Address
711 Louisiana Street, Suite 2160, Houston, TX, USA, 77002
Verde Clean Fuels Inc is a renewable energy company specializing in the conversion of synthesis gas, or syngas, derived from diverse feedstocks, such as biomass, MSW and mixed plastics, as well as natural gas (including synthetic natural gas) and other feedstocks, into liquid hydrocarbons that can be used as gasoline through a proprietary liquid fuels technology, the STG process.
Executives
| J Russell Porter |
10 percent owner |
1331 LAMAR STREET SUITE 1080, HOUSTON TX 77010 |
| Connally John B Iii |
10 percent owner |
16MARCUS CO, 1600 ROCKCLIFF ROAD, AUSTIN TX 78746 |
| Cenaq Sponsor Llc. |
10 percent owner |
4550 POST OAK PLACE DRIVE, SUITE 300, HOUSTON TX 77027 |
| Michael J Mayell |
10 percent owner |
C/O MERIDIAN RESOURCE CORP, 1401 ENCLAVE PARKWAY #300, HOUSTON TX 77077 |
| Martijn Dekker |
director |
600 TRAVIS STREET, HOUSTON TX 77002 |
| Cottonmouth Ventures Llc |
10 percent owner |
500 WEST TEXAS AVE., SUITE 100, MIDLAND TX 79701 |
| John R. Doyle |
officer: Chief Technology Officer |
600 TRAVIS STREET, SUITE 5050, HOUSTON TX 77002 |
| Ernest B. Miller |
officer: CEO and Interim CFO |
600 TRAVIS STREET, SUITE 5050, HOUSTON TX 77002 |
| Bluescape Clean Fuels Holdings, Llc |
10 percent owner |
300 CRESCENT COURT, SUITE 1860, DALLAS TX 75201 |
| Claire Dail St. |
director |
300 EAST 57TH STREET, NEW YORK NY 10022 |
| Bluescape Energy Recapitalization & Restructuring Fund Iv Lp |
10 percent owner |
200 CRESCENT COURT, SUITE 1900, DALLAS TX 75201 |
| Diamondback Energy E&p Llc |
10 percent owner |
14301 CALIBER DRIVE, SUITE 300, OKLAHOMA CITY OK 73134 |
| Hoff Graham Vant |
director |
C/O BLUESCAPE ENERGY PARTNERS, LLC, 200 CRESCENT COURT, SUITE 1900, DALLAS TX 75201 |
| Jonathan A Siegler |
director |
1601 BRYAN STREET, DALLAS TX 75201 |
| Duncan Palmer |
director |
ONE OWENS CORNING PARKWAY, TOLEDO OH 43659 |
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