What is Chesapeake Lodging Trust 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.
Chesapeake Lodging Trust 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
Chesapeake Lodging Trust (Chesapeake Lodging Trust) Business Description
Traded in Other Exchanges
N/A
Address
4300 Wilson Boulevard, Suite 625, Arlington, VA, USA, 22203
Chesapeake Lodging Trust is a real estate investment trust that invests in upper-upscale hotels in business and convention markets and, selectively, premium select-service hotels in urban settings and other locations in the United States. The company operates through its hotel ownership segment. The firm's operations include management agreements, which includes partnering with third parties to manage its hotels; franchise agreements; and TRS lease agreements, which are intercompany agreements between Chesapeake's property-owning subsidiaries and its TRS lessees. The company's revenue streams include room, food and beverage, and other, of which the room segment contributes the vast majority of total revenue.
Executives
| Thomas D Eckert |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| John W Hill |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| James L Francis |
director, officer: President & CEO |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Douglas W Vicari |
director, officer: EVP & CFO |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Thomas A Natelli |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| D Rick Adams |
officer: EVP & COO |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Jeffrey D Nuechterlein |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Graham J. Wootten |
officer: SVP, CAO & Secretary |
C/O CHESAPEAKE LODGING TRUST, 1997 ANNAPOLIS EXCHANGE PARKWAY, ANNAPOLIS MD 21401 |
| Angelique G. Brunner |
director |
C/O CHESAPEAKE LODGING TRUST, 4300 WILSON BOULEVARD, SUITE 625, ARLINGTON VA 22203 |
| George F Mckenzie |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Geoffrey Hulme |
10 percent owner |
C/O PORTER ORLIN LLC, 666 FIFTH AVENUE, 34TH FLOOR, NEW YORK NY 10103 |
| A Alex Porter |
10 percent owner |
C/O PORTER ORLIN LLC, 666 FIFTH AVENUE, 34TH FLOOR, NEW YORK NY 10103 |
| Paul E Orlin |
10 percent owner |
C/O PORTER ORLIN LLC, 666 FIFTH AVENUE, 34TH FLOOR, NEW YORK NY 10103 |
| Jonathan W Friedland |
10 percent owner |
C/O PORTER ORLIN LLC, 666 FIFTH AVENUE, 34TH FLOOR, NEW YORK NY 10103 |
| Porter Orlin Llc |
10 percent owner |
666 FIFTH AVENUE, SUITE 3403, NEW YORK NY 10103 |
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