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Elme Communities (Elme Communities) Predictability Rank


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What is Elme Communities 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.


Elme Communities 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

Elme Communities Predictability Rank Related Terms

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


Elme Communities (Elme Communities) Business Description

Traded in Other Exchanges
Address
1775 Eye Street North West, Suite 1000, Washington, DC, USA, 20006
Elme Communities is a real estate investment trust engaged in owning and operating properties in the greater Washington DC metropolitan area. The company's real estate portfolio is comprised of office, retail, and multifamily properties located primarily near major transportation nodes. Washington REIT derives nearly all of its income in the form of rental revenue from tenants organized into long-term leases. The company's office assets contribute the majority of this income, while the rest is split fairly evenly between its retail and multifamily locations. Washington REIT's largest tenants are banking, consulting, law, and financial services firms.
Executives
Susan Carras director 345 PARK AVENUE, NEW YORK NY 10154
Tiffany Michelle Butcher officer: EVP & COO 1775 EYE STREET NW, SUITE 1000, WASHINGTON DC 20006
Steven Freishtat officer: EVP & CFO 1775 EYE STREET NW, SUITE 1000, WASHINGTON DC 20006
Jennifer S Banner director 214N TRYON STREET, CHARLOTTE NC 28202
Susan Lilly Gerock officer: SVP & CIO 1775 EYE STREET, NW, SUITE 1000, WASHINGTON DC 20006
Ellen M. Goitia director 1775 EYE STREET, NW, SUITE 1000, WASHINGTON DC 20006
Taryn D. Fielder officer: SVP, GC & Corporate Secretary 1775 EYE STREET, N.W., SUITE 1000, WASHINGTON DC 20006
Murn Edward J. Iv officer: Managing Director, Residential 6110 EXECUTIVE BOULEVARD, SUITE 800, ROCKVILLE MD 20852
Wade Drew Hammond officer: VP & CAO elect & Controller 1775 EYE ST., NW, SUITE 1000, WASHINGTON DC 20006
John P Mcdaniel other: Trustee C/O MEDIFAST, INC., 3600 CRONDALL LANE, OWINGS MILLS MD 21117
Stephen Edward Riffe officer: E.V.P. & CFO-elect 1775 EYE STREET, NW, SUITE 1000, WASHINGTON DC 20006
Nolan Thomas H Jr director 14631 NORTH SCOTTSDALE RD, SUITE 200, SCOTTSDALE AZ 85254
Laura M Franklin officer: S.V.P. & Corp. Sec. CONSOLIDATED-TOMOKA LAND CO., PO BOX 10809, DAYTONA BEACH FL 32120
Thomas L Regnell officer: Mnging. Dir. - Acquisitions
Benjamin S Butcher director ONE FEDERAL STREET, 23RD FLOOR, BOSTON MA 02110

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