Roadrunner Transportation Systems (Roadrunner Transportation Systems) Predictability Rank

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What is Roadrunner Transportation Systems 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.

Roadrunner Transportation Systems 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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Roadrunner Transportation Systems (Roadrunner Transportation Systems) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Roadrunner Transportation Systems Inc (OTCPK:RRTS) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

1431 Opus Place, Suite 530, Downers Grove, IL, USA, 60515

Website

https://www.shiproadrunnerfreight.com

Roadrunner Transportation Systems Inc has operations in the United States. Its services involve the pickup, consolidation, linehaul, deconsolidation, and delivery of LTL shipments. The Company's revenues are derived from providing less than truckload transportation services domestically.

Executives

Peter A Nicholson	officer: See Remarks	C/O RC2 CORPORATION 1111 WEST 22ND STREET, SUITE 320 OAK BROOK IL 60523
Douglas James Smith	officer: See Remarks	1431 OPUS PLACE SUITE 530 DOWNERS GROVE IL 60515
William Goodgion	officer: See Remarks	4900 S. PENNSYLVANIA AVENUE CUDAHY WI 53110
Frank L Hurst	officer: President - Roadrunner Freight	1431 OPUS PLACE, SUITE 530 DOWNERS GROVE IL 60515
Thomas D. Stenglein	officer: See Remarks	1431 OPUS PLACE SUITE 530 DOWNERS GROVE IL 60515
Micah L Holst	officer: See Remarks	1431 OPUS PLACE SUITE 530 DOWNERS GROVE IL 60515
Christopher M Cook	officer: See Remarks	1431 OPUS PLACE SUITE 530 DOWNERS GROVE IL 60515
Michael K. Rapken	officer: Chief Information Officer	1431 OPUS PLACE SUITE 530 DOWNERS GROVE IL 60515
Curtis W Stoelting	director, officer: Chief Executive Officer	C/O RC2 CORPORATION, 1111 WEST 22ND STREET, SUITE 320, OAK BROOK IL 60523
Patrick J Unzicker	officer: See Remarks	3005 HIGHLAND PARKWAY, DOWNERS GROVE IL 60515
Robert M. Milane	officer: See Remarks	1431 OPUS PLACE, SUITE 530 DOWNERS GROVE IL 60515
Elliott Investment Management L.p.	10 percent owner	360 S. ROSEMARY AVE, 18TH FLOOR, WEST PALM BEACH FL 33401
Elliott International, L.p.	10 percent owner	C/O MAPLES & CALDER, P.O. BOX 309, UGLAND HOUSE, SOUTH CHURCH STREET, GEORGE TOWN E9 00000
Dennis P. Mathews	officer: Controller	1431 OPUS PLACE SUITE 530 DOWNERS GROVE IL 60515
Michael L Gettle	director, officer: See Remarks	4900 S. PENNSYLVANIA AVENUE CUDAHY WI 53110