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Ansys Predictability Rank


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4.5 (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.


Ansys 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

Ansys Predictability Rank Related Terms

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


Ansys Business Description

Ansys logo
Address
2600 ANSYS Drive, Canonsburg, PA, USA, 15317
Ansys is an engineering software company that provides simulation capabilities for structural, fluids, semiconductor power, embedded software, optical, and electromagnetic properties. Ansys employs over 4,000 people and serves over 50,000 customers globally, including those in aerospace defense and automotive.
Executives
Chakravarthy Anil director C/O INFORMATICA CORPORATION 2100 SEAPORT BOULEVARD REDWOOD CITY CA 94063
Frankola Jim director C/O CLOUDERA INC 1001 PAGE MILL ROAD, BLDG. 3 PALO ALTO CA 94089
Calderoni Robert director 851 WEST CYPRESS CREEK ROAD FORT LAUDERDALE FL 33309
Vijayaraghavan Ravi K director 2600 ANSYS DRIVE CANONSBURG PA 15317
Banerjee Prithviraj officer: Chief Technology Officer C/O CRAY INC. 901 FIFTH AVENUE, SUITE 1000 SEATTLE WA 98164
Dorchak Glenda director C/O MELLANOX TECHNOLOGIES, INC. 350 OAKMEAD PARKWAY, SUITE 100 SUNNYVALE CA 94085
Anasenes Nicole director 2600 ANSYS DRIVE CANONSBURG PA 15317
Gallimore Alec D. director 2600 ANSYS DRIVE CANONSBURG PA 15317
Lee Janet officer: VP, General Counsel 2600 ANSYS DRIVE CANONSBURG PA 15317
Zack Matthew C. officer: VP, Marketing/Corp Development 2600 ANSYS DRIVE CANONSBURG PA 15317
Mahoney Richard S. officer: VP, WORLDWIDE SALES & SUPPORT 2600 ANSYS DRIVE CANONSBURG PA 15317
Esquivel Fernando officer: VP - HUMAN RESOURCES 2600 ANSYS DRIVE CANONSBURG PA 15317
Dubois Guy director C/O GUIDEWIRE SOFTWARE INC 1001 E HILLSDALE BLVD SUITE 800 FOSTER CITY CA 94404
Hindsbo Mark officer: Vice President, Marketing 2600 ANSYS DR. CANONSBURG PA 15317
Kocis Robert Andrew officer: VP, WORLDWIDE SALES & SUPPORT 275 TECHNOLOGY DR CANONSBURG PA 15317

Ansys Headlines

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