Pangaea Logistics Solutions (Pangaea Logistics Solutions) Predictability Rank

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What is Pangaea Logistics Solutions 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.

Pangaea Logistics Solutions 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

Pangaea Logistics Solutions Predictability Rank Related Terms

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Pangaea Logistics Solutions (Pangaea Logistics Solutions) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Pangaea Logistics Solutions Ltd (NAS:PANL) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

PGA:Germany

Address

C/o Phoenix Bulk Carriers (US) LLC, 109 Long Wharf, Newport, RI, USA, 02840

Website

https://www.pangaeals.com

Pangaea Logistics Solutions Ltd and its subsidiaries provide seaborne drybulk transportation services. It transports drybulk cargos including grains, coal, iron, ore, pig, iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The firm's services include cargo loading, cargo discharge, vessel chartering, voyage planning and technical vessel management. The company derives all of its revenues from contracts of affreightment, voyage charters and time charters.

Executives

David Sgro	director	777 THIRD AVENUE, 37TH FLOOR, NEW YORK NY 10017
Eric Rosenfeld	director	777 THIRD AVENUE, 37TH FLOOR, NEW YORK NY 10017
Petersen Mads Rosenber Boye	officer: Chief Operating Officer	109 LONG WHARF, NEWPORT RI 02840
Karen H Beachy	director	PO BOX 1400, RAPID CITY SD 57709
Pangaea One Acquisition Holdings Xiv, Llc	10 percent owner	C/O CARTESIAN CAPITAL GROUP, LLC, 505 FIFTH AVENUE, NEW YORK NY 10017
Gianni Delsignore	officer: Chief Financial Officer	257 WICKHAM ROAD, NORTH KINGSTOWN RI 02852
Mark L Filanowski	director	C/O MARINE TRANSPORT CORP, 1200 HARBOR BOULEVARD, WEEHAWKEN NJ 07087
Nam Trinh	director	505 FIFTH AVENUE, 15TH FLOOR, CARTESIAN CAPITAL GROUP, NEW YORK NY 10017
Anthony Laura	officer: See Remarks	C/O PANGAEA LOGISTICS SOLUTIONS LTD., 109 LONG WHARF, NEWPORT RI 02840
Edward Coll	director, 10 percent owner, officer: Chief Executive Officer	C/O PANGAEA LOGISTICS SOLUTIONS LTD., 109 LONG WHARF, NEWPORT RI 02840
L.p. Malemod,	10 percent owner	C/O CARTESIAN CAPITAL GROUP, 505 FIFTH AVENUE, 15TH FLOOR, NEW YORK NY 10017
L.p. Nypsun,	10 percent owner	C/O CARTESIAN CAPITAL GROUP, 505 FIFTH AVENUE, 15TH FLOOR, NEW YORK NY 10017
L.p. Leggonly,	10 percent owner	C/O CARTESIAN CAPITAL GROUP, 505 FIFTH AVENUE, 15TH FLOOR, NEW YORK NY 10017
L.p. Imfinno,	10 percent owner	C/O CARTESIAN CAPITAL GROUP, 505 FIFTH AVENUE, 15TH FLOOR, NEW YORK NY 10017
Pangaea One Gp, Llc	10 percent owner	C/O CARTESIAN CAPITAL GROUP, 505 FIFTH AVENUE, 15TH FLOOR, NEW YORK NY 10017