cbdMD (YCBD) Predictability Rank

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What is cbdMD 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.

cbdMD 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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cbdMD (YCBD) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » cbdMD Inc (AMEX:YCBD) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

YCBDPA.PFD:USA

Address

8845 Red Oak Boulevard, Charlotte, NC, USA, 28217

Website

https://www.cbdmd.com

cbdMD Inc is a United States based company. It owns and operates the consumer hemp-based cannabidiol (CBD) brand, cbdMD, Paw CBD and hempMD. The company's product categories include CBD tinctures, CBD gummies, CBD topicals, CBD bath bombs, CBD oils, and CBD pet products. The firm distributes its products through an e-commerce website, wholesalers, and a variety of brick-and-mortar retailers.

Executives

Thomas Ronan Kennedy	officer: Interim CEO and CFO	8845 RED OAK BLVD, CHARLOTTE NC 28217
Bakari T. Sellers	director	4231 VOORHEES ROAD, DENMARK SC 29042
Raines William F Iii	director	8314 TOSOMOCK LANE, HUNTERSVILLE NC 28078
Scott G. Stephen	director	4249 NORTH WINCHESTER AVE., CHICAGO IL 60613
Sibyl Nichole Swift	director	730 HAWTHORNE LANE, APT 441, CHARLOTTE NC 28204
Kevin Macdermott	officer: President	9580 CALDWELL RD, MOUNT ULLA NC 28125
Wiesehan John J Iii	officer: Chief Revenue Officer	8845 RED OAK BOULEVARD, CHARLOTTE NC 28217
Sim Farar	director	8845 RED OAK BOULEVARD, CHARLOTTE NC 28217
Martin A. Sumichrast	director, officer: Chairman of the Board and CEO	11125 COLONIAL COUNTRY LANE, CHARLOTTE NC 28277
Raymond Scott Coffman	director	230 S. TRYON ST., #1302, CHARLOTTE NC 28202
Peter J. Ghiloni	director	115 DEER ESTATES LANE, PONTE VEDRA BEACH FL 32082
Mark S Elliott	officer: CFO & COO	C/O LEVEL BRANDS, INC., 4521 SHARON ROAD, SUITE 450, CHARLOTTE NC 28211
Gregory C Morris	director	421 CRANBORNE CHASE, FORT MILL SC 29708
Caryn Nicole Dunayer	officer: President	8476 CATAWBA DOVE DR., BELMONT NC 28012
Erik Sterling	10 percent owner	5505 KALANIANAOLE HWY, HONOLULU HI 96821