Market Cap : 62.55 M | Enterprise Value : 73.29 M | PE Ratio : At Loss | PB Ratio : 1.80 |
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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.
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.
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 ValuationsThank you for viewing the detailed overview of Orgenesis's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.
Sidransky David | director | JOHNS HOPKINS UNIVERSITY 720 RUTLAND AVENUE BALTIMORE MD 21205 |
Reithinger Neil | officer: CFO, Treasurer and Secretary | 14950 N. 83RD PLACE SUITE 1 SCOTTSDALE AZ 85260 |
Philips Mario | director | C/O ATMI, INC DANBURY CT 06810 |
Ferber Sarah | officer: Chief Scientific Officer | 17B HAHASKALA STREET TEL AVIV L3 67890 |
Yachin Guy | director | 7 ORCHARD WAY N POTOMAC MD 20854 |
Nanda Ashish | director | 2301, 23RD FLOOR, TIFFANY TOWERS CLUSTER W, JLT, DUBAI, UAE DUBAI C0 4452 |
Bedoret Denis | officer: See Remarks | 48, RUE AUGUSTE PICCARD GOSSELIES C9 6041 |
Universite Libre De Bruxelles | other: less than 10% | AVENUE F, ROOSEVELT, 50 BRUSSELS C9 1050 |
Theodorus Ii Sa | other: less than 10% | ALLEE DE LA RECHERCHE, 12 BRUSSELS C9 1070 |
Theodorus Sca | other: less than 10% | ALLEE DE LA RECHERCHE, 12 BRUSSELS C9 1070 |
Belenger Olivier | other: less than 10% | DIEWEG, 69 BRUSSELS C9 1070 |
Shvartz Oded | 10 percent owner | 130 BIRUINTEI BVD. PANTELIMON, ILFOV S5 0000000 |
Bultot Hugues | director | AVENUE DE L??HORIZON 24 WOLUWE SAINT PIERRE C9 1150 |
Buyse Chris Georges Frans | director | BAILLET LATOURLEI 119A BRUSSELS C9 2390 |
Tenne Joseph | officer: CFO Treasurer Secretary | 6225 NEIL ROAD, SUITE 300 C/O ORMAT TECHNOLOGIES, INC. RENO NV 89511 |
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By Seekingalpha 2021-11-06