What is Marqeta 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.
Marqeta 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
Marqeta (Marqeta) Business Description
Traded in Other Exchanges
Address
180 Grand Avenue, 6th Floor, Oakland, CA, USA, 94612
Headquartered in Oakland, California, and founded in 2010, Marqeta provides its clients with a card-issuing platform that offers the infrastructure and tools necessary to offer digital, physical, and tokenized payment options without the need for a traditional bank. The company's open APIs are designed to allow third parties like DoorDash, Klarna, and Block to rapidly develop and deploy innovative card-based products and payment services without the need to develop the underlying technology. The company generates revenue primarily through processing and ATM fees for cards issued on its platform.
Executives
| Randall F. Kern |
officer: Chief Technology Officer |
C/O MARQETA, INC., 180 GRAND AVE., FLR 6, OAKLAND CA 94612 |
| Godfrey Sullivan |
director |
SPLUNK INC., 250 BRANNAN STREET, SAN FRANCISCO CA 94107 |
| Judson C Linville |
director |
200 VESEY STREET, NEW YORK NY 10285 |
| Martha Cummings |
director |
C/O MARQETA, INC., 180 GRAND AVE., FLR 6, OAKLAND CA 94612 |
| Najuma Atkinson |
director |
C/O HASBRO, INC., 1011 NEWPORT AVE, PAWTUCKET RI 02861 |
| Crystal Sumner |
officer: See Remarks |
415 KEARNY STREET, SAN FRANCISCO CA 94108 |
| Todd Pollak |
officer: Chief Revenue Officer |
180 GRAND AVENUE, 6TH FLOOR, OAKLAND CA 94612 |
| Simon Khalaf |
director, officer: Chief Executive Officer |
180 GRAND AVENUE, 6TH FLOOR, OAKLAND CA 94612 |
| Srikiran Prasad |
director |
180 GRAND AVENUE, 6TH FLOOR, OAKLAND CA 94612 |
| Seth R Weissman |
officer: See Remarks |
3055 CLEARVIEW WAY, SAN MATEO CA 94402 |
| Michael Milotich |
officer: Chief Financial Officer |
180 GRAND AVENUE, 6TH FLOOR, OAKLAND CA 94612 |
| 83north Ii Limited Partnership |
10 percent owner |
10 ABBA EBAN BOULEVARD, BUILDING C, 9TH FLOOR, HERZLIYA PITUACH L3 46733 |
| Iconiq Strategic Partners Iii, L.p. |
10 percent owner |
394 PACIFIC AVENUE, 2ND FLOOR, SAN FRANCISCO CA 94111 |
| Vidya Peters |
officer: Chief Marketing Officer |
C/O MARQETA, INC., 180 GRAND AVE., FLR 6, OAKLAND CA 94612 |
| Amy Chang |
director |
2100 SEAPORT BLVD., C/O INFORMATICA CORPORATION, REDWOOD CITY CA 94063 |
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