Old National Bancorp (Old National Bancorp) Predictability Rank

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What is Old National Bancorp 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.

Old National Bancorp 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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Old National Bancorp (Old National Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Old National Bancorp (NAS:ONB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

ONBPP.PFD:USA

Address

One Main Street, Evansville, IN, USA, 47708

Website

https://www.oldnational.com

Old National Bancorp with almost $10 billion in assets following its latest acquisition, Old National Bancorp is a financial services bank holding company headquartered in Indiana. Based in Evansville, Ind., Old National owns multiple financial services operations in Indiana, Illinois, and Kentucky. The company provides a group of similar community banking services, including such products and services as commercial, real estate, and consumer loans; deposits; and brokerage, trust, and investment advisory services.

Executives

Michael L Scudder	director, officer: Executive Chairman	300 PARK BLVD, SUITE 405, ITASCA IL 60143
Ryan James C Iii	officer: SENIOR VP & TREASURER	ONE MAIN STREET, EVANSVILLE IN 47708
Kathryn Hayley	director	C/O AON CORPORATION, LAW DEPT, 200 EAST RANDOLPH STREET, 8TH FLOOR, CHICAGO IL 60601
Thomas Lynn Brown	director	8750 W. BRYN MAWR, SUITE 1300, CHICAGO IL 60631
Peter J Henseler	director	C/O RC2 CORPORATION, 1111 WEST 22ND STREET, SUITE 320, OAK BROOK IL 60523
Ellen A Rudnick	director	5807 SOUTH WOODLAWN AVENUE, MP POLSKY CENTER FOR ENTREPRENEURSHIP, CHICAGO IL 60637
Mark G Sander	officer: President and COO	1200 HANSEN ROAD, GREEN BAY WI 54304
Angela L Putnam	officer: CAO and Corporate Controller	ONE PIERCE PLACE, SUITE 1500, ITASCA IL 60143
Nicholas J Chulos	officer: Chief Legal Officer & Corp Sec	ONE PIERCE PLACE, SUITE, ITASCA IL 60143
Chady M. Alahmar	officer: CEO, Wealth Management	ONE MAIN STREET, EVANSVILLE IN 47708
Barbara A Boigegrain	director	ONE PIERCE PLACE, SUITE 1500, ITASCA IL 60143
Michael Small	director	C/O CENTENNIAL COMMUNICATIONS CORP, 3349 RTE 138, WALL NJ 07719
Van Arsdell Stephen C	director	ONE PIERCE PLACE, SUITE 1500, ITASCA IL 60143
Austin M Ramirez	director	ONE MAIN STREET, EVANSVILLE IN 47708
Ryan C Kitchell	director	ONE MAIN STREET, EVANSVILLE IN 47708