PTC Therapeutics (PTC Therapeutics) Predictability Rank

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What is PTC Therapeutics 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.

PTC Therapeutics 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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PTC Therapeutics (PTC Therapeutics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » PTC Therapeutics Inc (NAS:PTCT) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

BH3:Germany

Address

100 Corporate Court, South Plainfield, NJ, USA, 07080

Website

https://www.ptcbio.com

PTC Therapeutics Inc is a biopharmaceutical company focused on the discovery, development, and commercialization of orally administered, small-molecule therapeutics. Its target area is RNA biology post-transcriptional control processes of the events occurring in a cell when an RNA messenger is copied from DNA during the transcription process. The discovered products address multiple therapeutic areas, including rare disorders, such as nonsense mutations in Duchenne muscular dystrophy and oncology.

Executives

Neil Gregory Almstead	officer: EVP Research Pharma Ops & Tech	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Matthew B. Klein	officer: Chief Development Officer	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Mark Elliott Boulding	officer: Exec. VP and CLO	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Eric Pauwels	officer: Chief Business Officer	550 HILLS DRIVE, BEDMINSTER NJ 07921
Christine Marie Utter	officer: Principal Financial Officer	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Lee Scott Golden	officer: Chief Medical Officer	17199 N. LAUREL PARK DRIVE, SUITE 401, LIVONIA MI 48152
Michael Schmertzler	director	110 WASHINGTON STREET, SUITE 1300, CONSHOHOCKEN PA 19428
Pierre Gravier	officer: CHIEF FINANCIAL OFFICER	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Alethia Young	director	C/O GRAPHITE BIO, INC., 201 HASKINS WAY, SUITE 210, SOUTH SAN FRANCISCO CA 94080
Bell William F. Jr.	director	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Emma Reeve	director	C/O PAREXEL INTERNATIONAL CORPORATION, 195 WEST STREET, WALTHAM MA 02451
Allan Steven Jacobson	director	PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
David P Southwell	director	C/O INOTEK PHARMACEUTICALS CORPORATION, 91 HARTWELL AVENUE, LEXINGTON MA 02421
Emily Luisa Hill	officer: Chief Financial Officer	C/O PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080
Stuart Walter Peltz	director, officer: Chief Executive Officer	PTC THERAPEUTICS, INC., 100 CORPORATE COURT, SOUTH PLAINFIELD NJ 07080