What is Blue Owl Capital Predictability Rank?
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.
Blue Owl Capital 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
Blue Owl Capital (Blue Owl Capital) Business Description
Traded in Other Exchanges
Address
399 Park Avenue, 38th Floor, New York, NY, USA, 10022
Blue Owl Capital Corp is a specialty finance company and business development company (BDC) focused on providing direct lending solutions to U.S. middle-market companies. The company seeks to generate current income and, to a lesser extent, capital appreciation by targeting investment opportunities with favorable risk-adjusted returns, including senior secured, subordinated, or mezzanine loans and equity-related instruments. Its investment strategy is intended to generate favorable returns across credit cycles with an emphasis on preserving capital.
Executives
| Chris Temple |
director |
3953 MAPLE AVENUE, SUITE 180, DALLAS TX 75219 |
| Matthew Swatt |
officer: Co-Treasurer |
399 PARK AVE 38TH FL, NEW YORK DC 10022 |
| Eric A. Kaye |
director |
C/O OWL ROCK CAPITAL CORPORATION, 245 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10167 |
| Craig Packer |
director, officer: President and CEO (1) |
C/O BLUE OWL CAPITAL INC., 399 PARK AVENUE, 37TH FLOOR, NEW YORK NY 10022 |
| Edward H Dalelio |
director |
1000 BOARDWALK AT VIRGINIA AVENUE, ATLANTIC CITY NJ 08401 |
| Alexis Maged |
officer: Vice President |
C/O OWL ROCK CAPITAL CORPORATION, 245 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10167 |
| Melissa Weiler |
director |
399 PARK AVE 38TH FL, NEW YORK DC 10022 |
| Victor Woolridge |
director |
399 PARK AVENUE, 38TH FLOOR, NEW YORK NY 10022 |
| Jennifer Mcmillon |
officer: Co-Treasurer and Co-Controller |
C/O OWL ROCK CAPITAL CORPORATION, 399 PARK AVENUE, 38TH FLOOR, NEW YORK NY 10022 |
| Shari Withem |
officer: Co-Treasurer |
399 PARK AVE 38TH FL, NEW YORK NY 10022 |
| Jonathan Lamm, |
officer: See Remarks |
200 WEST STREET, NEW YORK NY 10282 |
| Regents Of The University Of California |
10 percent owner |
1111 FRANKLIN STREET, 6TH FLOOR, OAKLAND CA 94607 |
| Neena Reddy |
officer: Vice President and Secretary |
C/O OWL ROCK CAPITAL ADVISORS LLC, 399 PARK AVENUE, 38TH FLOOR, NEW YORK NY 10022 |
| Karen F. Hager |
officer: Chief Compliance Officer |
OWL ROCK CAPITAL CORPORATION, 245 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10167 |
| Bryan Thomas Cole |
officer: Controller |
C/O OWL ROCK CAPITAL CORPORATION, 245 PARK AVENUE, 41ST FLOOR, NEW YORK NY 10167 |
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