QuickLogic (QuickLogic) Predictability Rank

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What is QuickLogic 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.

QuickLogic 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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QuickLogic (QuickLogic) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » QuickLogic Corp (NAS:QUIK) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

QKL1:Germany

Address

2220 Lundy Avenue, San Jose, CA, USA, 95131

Website

https://www.quicklogic.com

QuickLogic Corp is engaged in the development and marketing of semiconductor and software algorithm solutions for mobile and portable electronics. The company's products enable smartphone, wearable and IoT device Original Equipment Manufacturers, or OEMs, to deliver long battery life for their customers. Its solutions fall into one of four categories: Sensor Processing, eFPGA IP and its associated Tools, Display, and Smart Connectivity. Geographically, it has a presence in the Asia Pacific, Europe, and North America. It also works with mobile processor manufacturers, sensor manufacturers, sensor fusion, and context awareness algorithm developers in the development of reference designs.

Executives

Brian C Faith	officer: VP WW Sales & Marketing	C/O QUICKLOGIC CORPORATION, 1277 ORLEANS DRIVE, SUNNYVALE CA 94089
Timothy Saxe	officer: Chief Technology Officer	109 SYLVAN WAY, LOS ALTOS CA 94022
Elias Nader	officer: CFO, SVP Finance	1778 MCCARTHY BLVD., C/O SIGMA DESIGNS, INC., MILPITAS CA 95035
Russell Christine	director	17165 PINE STREET, LOS GATOS CA 95032
Joyce Kim	director	2220 LUNDY AVENUE, 2220 LUNDY AVENUE, SAN JOSE CA 95131
Radhika Krishnan	director	333 THREE D SYSTEMS CIRCLE, ROCK HILL SC 29730
Andrew J Pease	officer: VP, Worldwide Sales
Gary H Tauss	director
Michael Farese	director	6290 SEQUENCE DRIVE, SAN DIEGO CA 92121
Robert H Schoenfield	officer: VP Worldwide Sales	C/O AUDIENCE, INC., 331 FAIRCHILD DR., MOUNTAIN VIEW CA 94043
Suping (sue) Cheung	officer: Controller, Princ. Acctg. Off.	C/O QUICKLOGIC CORPORATION, SUNNYVALE CA 94089
Daniel A Rabinovitsj	director	400 W CESAR CHAVEZ, AUSTIN TX 78701
E Thomas Hart	director, officer: Chairman, President and CEO	1277 ORLEANS DRIVE, SUNNYVALE CA 94089-1138
Edgar Auslander	director	1277 ORLEANS DRIVE, SUNNYVALE CA 94089
Maxime Bouvat-merlin	officer: VP WW Engineering	C/O SONOS, INC., 614 CHAPALA STREET, SANTA BARBARA CA 93101