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Old Dominion Freight Line Predictability Rank


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4.5 (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.


Competitive Comparison

For the Trucking subindustry, Old Dominion Freight Line's Predictability Rank, along with its competitors' market caps and Predictability Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Old Dominion Freight Line Predictability Rank Distribution

For the Transportation industry and Industrials sector, Old Dominion Freight Line's Predictability Rank distribution charts can be found below:

* The bar in red indicates where Old Dominion Freight Line's Predictability Rank falls into.



Old Dominion Freight Line 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

Old Dominion Freight Line Predictability Rank Related Terms

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


Old Dominion Freight Line Business Description

Old Dominion Freight Line logo
Industry
Industrials » Transportation NAICS : 484121 SIC : 4213
Traded in Other Exchanges
Address
500 Old Dominion Way, Thomasville, NC, USA, 27360
Old Dominion Freight Line is the third- largest less-than-truckload carrier in the United States, with more than 240 service centers and 9,200-plus tractors. OD is by far one of the most disciplined and efficient providers in the trucking industry, and its profitability and capital returns stand head and shoulders above its peers. Strategic initiatives revolve around increasing network density through market share gains and maintaining industry- leading service via consistent infrastructure investment.
Executives
Hanley Patrick D director 1000 SEMMES AVE RICHMOND VA 23224
Suggs Leo H director UNION PACIFIC CORP 1416 DODGE ST OMAHA NE 68179
Stallings Wendy T. director 500 OLD DOMINION WAY THOMASVILLE NC 27360
Gabosch Bradley R director 500 OLD DOMINION WAY THOMASVILLE NC 27360
Wray D. Michael director 7205 PINETREE ROAD RICHMOND VA 23229
Kasarda John D. director 500 OLD DOMINION WAY THOMASVILLE NC 27360
Aaholm Sherry A director 500 JACKSON STREET COLUMBUS IN 47201
Congdon John R Jr director C/O OLD DOMINION FREIGHT LINE, INC. 500 OLD DOMINION WAY THOMASVILLE NC 27360
Parr Ross H. officer: SVP - Legal Affairs, GC & Sec. 500 OLD DOMINION WAY THOMASVILLE NC 27360
Plemmons Gregory B officer: SVP - Sales 500 OLD DOMINION WAY THOMASVILLE NC 27360
Brooks Christopher T officer: SVP - Human Resources & Safety 500 OLD DOMINION WAY THOMASVILLE NC 27360
Maready Kimberly S officer: VP - Accounting & Fin. (PAO) 500 OLD DOMINION WAY THOMASVILLE NC 27360
Satterfield Adam N officer: CFO, SVP-Finance & Asst. Sec. 500 OLD DOMINION WAY THOMASVILLE NC 27360
Bates David J. officer: SVP - Operations 500 OLD DOMINION WAY THOMASVILLE NC 27360
Overbey Cecil E. Jr. officer: SVP - Strategic Development 500 OLD DOMINION WAY THOMASVILLE NC 27360

Old Dominion Freight Line Headlines

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