Lakeland Financial (Lakeland Financial) Predictability Rank

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What is Lakeland Financial 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.

Lakeland Financial 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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Lakeland Financial (Lakeland Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Lakeland Financial Corp (NAS:LKFN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

202 East Center Street, P.O.Box 1387, Warsaw, IN, USA, 46581-1387

Website

https://www.lakecitybank.com

Lakeland Financial Corp is a bank holding company. It provides commercial, retail, wealth advisory and investment management services. Lakeland offers a broad array of products and services throughout its Northern and Central Indiana markets. The company offers commercial and consumer banking services, as well as trust and wealth management, brokerage, and treasury management commercial services. It serves a wide variety of industries including, among others, commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services and healthcare.

Executives

Bartels Robert E Jr	director	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
M Scott Welch	director	6 LONGWOOD COURT, ELKHART IN 46516
Jonathan P Steiner	officer: Senior Vice President	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
Emily E Pichon	director	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
Brian J Smith	director	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
Donald Robinson-gay	officer: Senior Vice President	PO BOX 1387, WARSAW IN 46581
Kyra E Clark	officer: Senior Vice President	P.O. BOX 1387, WARSAW IN 46581-1387
Steven D Ross	director	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
Brok A Lahrman	officer: SVP, Chief Accounting Officer	P.O. BOX 1387, WARSAW IN 46581
James Rickard Donovan	officer: SVP, General Counsel	P.O. BOX 1387, WARSAW IN 46581-1387
Stephanie R Leniski	officer: Senior Vice President	P.O. BOX 1387, WARSAW IN 46581-1387
Blake Augsburger	director	P.O. BOX 1387, WARSAW IN 46581
Michael L Kubacki	director, officer: President	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
Lisa M O'neill	officer: EVP & CFO	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387
Michael E Gavin	officer: EVP & CCO	LAKELAND FINANCIAL CORPORATION, P.O. BOX 1387, WARSAW IN 46581-1387