Outbrain (Outbrain) Predictability Rank

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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.

Outbrain 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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Outbrain (Outbrain) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Interactive Media » Outbrain Inc (NAS:OB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

852:Germany 852:Germany

Address

111 West 19th Street, New York, NY, USA, 10011

Website

https://www.outbrain.com

Outbrain Inc is a platform powering the open web that matches audiences with personalized content and ads, driving quality engagement. Its platform delivers ads to end-users that appear as links to articles, products, and videos on media partners' sites. It derives revenue from advertisers through user engagement with the ads that it places on media partners' web pages and mobile applications. The company has its geographic presence in Europe, the Middle East, and Africa followed by the USA and others.

Executives

Wenkai Bradshaw	officer: CAO & VP Corporate Controller	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Jason Kiviat	officer: Chief Financial Officer	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Nithya B. Das	director	C/O OLO INC., 99 HUDSON STREET, 10TH FLOOR, NEW YORK NY 10013
Ori Lahav	officer: Co-Founder, CTO and GM, Israel	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Yaffa Krindel	director	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Jhaveri Kathryn Taneyhill	director	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Yaron Galai	director, officer: Co-Founder and Co-CEO	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Viola Ventures Iii, L.p.	10 percent owner	12 ABBA EBAN AVENUE, CKERSTEIN TOWERS BUILDING D, HERZLIYA L3 4672530
Gemini Partners Investors Iv (annex Fund) L.p.	10 percent owner	1 ABBA EBAN AVENUE, MERKAZIM 2001,, BLDG A, 3RD FLOOR, HERZLIYA L3 00000
Gemini Israel Iv (annex Fund) Limited Partnership	10 percent owner	1 ABBA EBAN AVENUE, MERKAZIM 2001,, BLDG A, 3RD FLOOR, HERZLIYA L3 00000
Gemini Partners Investors Iv L.p.	10 percent owner	1 ABBA EBAN AVENUE, MERKAZIM 2001,, BLDG A, 3RD FLOOR, HERZLIYA L3 00000
Gemini Israel Iv Limited Partnership	10 percent owner	1 ABBA EBAN AVENUE, MERKAZIM 2001,, BLDG A, 3RD FLOOR, HERZLIYA L3 00000
Arne Wolter	director	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011
Lsvp Vii Trust	10 percent owner	2200 SAND HILL ROAD, SUITE 100, MENLO PARK CA 94025
David Kostman	director, officer: Co-Chief Executive Officer	C/O OUTBRAIN INC., 111 WEST 19TH STREET, NEW YORK NY 10011