What is Quotient Technology Predictability Rank?
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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.
Quotient Technology 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
Quotient Technology (Quotient Technology) Business Description
Traded in Other Exchanges
N/A
Address
1260 East Stringham Avenue, 6th Floor, Salt Lake, UT, USA, 84106
Quotient Technology Inc is a promotions and media technology company that delivers targeted digital promotions and media for advertisers and retailers to reach consumers and drive action. Using the company's platforms and suite of omnichannel solutions, advertisers can plan, target, deliver and measure performance marketing and brand marketing to impact sales. The Company's network includes the digital properties of retail partners, non-retail publisher partners and CPG customers, social media platforms, its consumer brand, Shopmium, and its digital out-of-home properties. This network provides the Company with proprietary and licensed data, including retailers' in-store point-of-sale shopper data, first-party consumer behavior and purchase intent data, and location intelligence.
Executives
| Kathryn White Vanek |
director |
C/O QUOTIENT TECHNOLOGY INC., 1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Robert A Mcdonald |
director |
C/O QUOTIENT TECHNOLOGY INC., 1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Tracey Elizabeth Figurelli |
director |
C/O QUOTIENT TECHNOLOGY INC., 1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Michael H Wargotz |
director |
AXCESS WORLDWIDE, 515 MADISON AVE., 15TH FLOOR, NEW YORK NY 10022 |
| Kimberly Anstett |
director |
1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Joseph E Reece |
director |
ONE VALERO WAY, BUILDING D, SUITE 200, SAN ANTONIO TX 78249 |
| Yuneeb Ullah Khan |
officer: CFO & COO |
1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Matthew Krepsik |
director, officer: Chief Executive Officer |
400 LOGUE AVENUE, MOUNTAIN VIEW CA 94043 |
| Andrew J Gessow |
director |
C/O QUOTIENT TECHNOLOGY INC., 1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Scott David Raskin |
officer: President |
QUOTIENT TECHNOLOGY INC., 1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| John Peter Kellerman |
officer: Interim CFO |
1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Matthew John O'grady |
director |
1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Lorraine Hariton |
director |
C/O QUOTIENT TECHNOLOGY INC, 1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
| Alison Tattersall Hawkins |
director |
400 LOGUE AVENUE, MOUNTAIN VIEW CA 94043 |
| Eric Domingo Higgs |
director |
1260 EAST STRINGHAM AVENUE, SUITE 600, SALT LAKE CITY UT 84106 |
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