What is Renovaro Predictability Rank?
1 (5)
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.
Renovaro 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
Renovaro (Renovaro) Business Description
Traded in Other Exchanges
Address
2080 Century Park East, Suite 906, Los Angeles, CA, USA, 90067
Renovaro Biosciences Inc Formerly Enochian BioSciences Inc is a biopharmaceutical company. It is engaged in the research and development of pharmaceutical and biological products for the treatment of HIV, HBV, and cancer with the intent to manufacture said products.
Executives
| Leni Boeren |
director |
2080 CENTURY PARK EAST, #906, LOS ANGELES CA 90067 |
| Ruud Hendriks |
director |
CHATEAU D'AZUR, BLVD D'LTALIE 44, MONACO O9 C11298000 |
| Ole Abildgaard |
10 percent owner |
VEDBAEK STRANDVEJ 506, VEDBAEK G7 2950 |
| Francois Binette |
officer: Executive Vice President |
2022 N. ALVARADO STREET, LOS ANGELES CA 90039 |
| Serhat Gumrukcu |
10 percent owner |
2080 CENTURY CITY EAST, SUITE 906, LOS ANGELES CA 90067 |
| Rene Sindlev |
director, 10 percent owner |
FRUEBJERGVEJ 3 BOX 62, COPENHAGEN G7 2100 |
| Carl Forest Sandler |
other: Former director see note below |
330 EAST 33RD STREET, APARTMENT 3A, NEW YORK FL 10016 |
| Jayne Mcnicol |
director |
606 NORTHERN AVENUE, MILL VALLEY CA 94941 |
| Gregg H Alton |
director |
333 LAKESIDE DRIVE, FOSTER CITY CA 94404 |
| Carol L Brosgart |
director |
C/O TOBIRA THERAPEUTICS, INC., 701 GATEWAY BOULEVARD, SOUTH SAN FRANCISCO CA 94080 |
| Henrik Gronfeldt-sorensen |
director |
STUMPEDYSSEVEJ 17, HORSHOLM G7 2970 |
| Luisa Puche |
officer: Chief Financial Officer |
318 NE 104TH STREET, MIAMI FL 33138 |
| Luc Debruyne |
director |
NOORDENWINDHELLING 2 02/05, OOSTDUINKERKE C9 8670 |
| Anderson Wittekind William |
10 percent owner |
8581 SANTA MONICA BLVD, LOS ANGELES CA 90069 |
| Leire, Eric Jean Marie |
director, officer: CEO; President |
C/O DANDRIT BIOTECH USA, INC., P.O. BOX 189, RANDOLPH VT 05060 |
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