What is Cardiff Oncology Predictability Rank?
1 (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.
Cardiff Oncology 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
Cardiff Oncology (Cardiff Oncology) Business Description
Traded in Other Exchanges
Address
11055 Flintkote Avenue, San Diego, CA, USA, 92121
Cardiff Oncology Inc is a clinical-stage, biotechnology company, developing treatment options for cancer patients in indications with the greatest medical need, including KRAS-mutated metastatic colorectal cancer, pancreatic cancer, metastatic castrate-resistant prostate cancer and leukemias.
Executives
| Gary W Pace |
director |
C/O RESMED INC, 14040 DANIELSON STREET, POWAY CA 92064-6857 |
| Fairooz Kabbinavar |
officer: Chief Medical Officer |
C/O TOCAGEN INC., 4242 CAMPUS POINT COURT, STE. 500, SAN DIEGO CA 92121 |
| Mark Erlander |
officer: Chief Scientific Officer |
C/O TROVAGENE, INC., 11055 FLINTKOTE AVENUE, SUITE A, SAN DIEGO CA 92121 |
| Lale White |
director |
310 GODDARD, SUITE 150, IRVINE CA 92618 |
| James O Armitage |
director |
C/O TESARO, INC., 1000 WINTER ST., SUITE 3300, WALTHAM MA 02451 |
| James E. Levine |
officer: Chief Financial Officer |
55 CAMBRIDGE PARKWAY, 8TH FLOOR, CAMBRIDGE MA 02142 |
| Renee P Tannenbaum |
director |
9220 KIRBY DRIVE, SUITE 500, HOUSTON TX 77054 |
| Tod Smeal |
officer: Chief Scientific Officer |
11055 FLINTKOTE AVENUE, SA DIEGO CA 92121 |
| Katherine L Ruffner |
officer: Chief Medical Officer |
11055 FLINTKOTE AVENUE, SAN DIEGO CA 92121 |
| Mani Mohindru |
director |
C/O CARA THERAPEUTICS, INC., 4 STAMFORD PLAZA, 107 ELM STREET, STAMFORD CT 06902 |
| Rodney S Markin |
director |
C/O UNIVERSITY OF NEBR MEDICAL CENTER, 983135 NEBRASKA MEDICAL CENTER, OMAHA NE 68198-3135 |
| Gary S Jacob |
director |
|
| Vicki Kelemen |
officer: Exec. VP and COO |
11055 FLINTKOTE AVENUE, SAN DIEGO CA 92121 |
| John P Brancaccio |
director |
C/O TAMIR BIOTECHNOLOGY, INC., 11 DEER PARK DRIVE, SUITE 204, MONMOUTH JUNCTION NJ 08852 |
| Rajeev M. Shah |
10 percent owner |
200 BERKELEY STREET, 18TH FLOOR, BOSTON MA 02116 |
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