Bellerophon Therapeutics (Bellerophon Therapeutics) Predictability Rank

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What is Bellerophon Therapeutics Predictability Rank?

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.

Bellerophon Therapeutics 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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Bellerophon Therapeutics (Bellerophon Therapeutics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Bellerophon Therapeutics Inc (OTCPK:BLPH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

184 Liberty Corner Road, Suite 302, Warren, NJ, USA, 07059

Website

https://www.bellerophon.com

Bellerophon Therapeutics Inc is a clinical-stage therapeutics company. The firm develops innovative products combining novel drugs and devices to treat cardiopulmonary diseases. It develops products under its INOpulse platform, which is an extension of the technology that is used in hospitals to deliver continuous-flow inhaled nitric oxide. The company's products are aimed at the treatment of different kinds of pulmonary hypertension.

Executives

Puissance Life Science Opportunities Fund Vi	10 percent owner	950 THIRD AVENUE, FL 25, NEW YORK NY 10022
Naseem Amin	director	53 FRONTAGE ROAD, SUITE 301, HAMPTON NJ 08827
Mary Ann Cloyd	director	184 LIBERTY CORNER ROAD, SUITE 302, WARREN NJ 07059
Theodore T Wang	director	C/O PUISSANCE CAPITAL MANAGEMENT LP, 950 THIRD AVENUE, 25TH FLOOR, NEW YORK NY 10022
Scott P Bruder	director	C/O BELLEROPHON THERAPEUTICS, 53 FRONTAGE ROAD, SUITE 301, HAMPTON NJ 08827
Crispin Teufel	director	184 LIBERTY CORNER ROAD, SUITE 302, WARREN NJ 07059
Puissance Capital Fund (gp) Llc	10 percent owner	950 THIRD AVENUE, 25TH FLOOR, NEW YORK NY 10022
Parag Suresh Shah	officer: VP of Business Operations	C/O BELLEROPHON THERAPEUTICS, INC., 184 LIBERTY CORNER ROAD, SUITE 302, NEW JERSEY NJ 07059
Martin Dekker	officer: See Remarks	53 FRONTAGE ROAD, SUITE 301, PERRYVILLE III CORPORATE PARK, HAMPTON NJ 08827
Peter Fernandes	officer: See Remarks	PERRYVILLE III CORPORATE PARK, 53 FRONTAGE ROAD, SUITE 301, HAMPTON NJ 08827
Bobae Kim	officer: VP Reg. Affairs & Quality	184 LIBERTY CORNER ROAD, SUITE 302, WARREN NJ 07059
Nicholas Laccona	officer: Controller, (PFO & PAO)	184 LIBERTY CORNER ROAD, SUITE 302, WARREN NJ 07059
Steven B Klinsky	10 percent owner	C/O NEW MOUNTAIN CAPITAL, L.L.C., 1633 BROADWAY, 48TH FLOOR, NEW YORK NY 10019
New Mountain Capital, L.l.c.	10 percent owner	1633 BROADWAY, 48TH FLOOR, NEW YORK NY 10019
New Mountain Investments Ii, Llc	10 percent owner	787 SEVENTH AVENUE, 49TH FLOOR, NEW YORK NY 10019