Safeguard Scientifics (Safeguard Scientifics) Predictability Rank

View and export this data going back to 1971. Start your Free Trial

What is Safeguard Scientifics 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.

Safeguard Scientifics 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

Safeguard Scientifics Predictability Rank Related Terms

Thank you for viewing the detailed overview of Safeguard Scientifics's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Safeguard Scientifics (Safeguard Scientifics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Safeguard Scientifics Inc (OTCPK:SFES) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

SFU:Germany

Address

150 N. Radnor Chester Road, Suite F-200, Radnor, PA, USA, 19087

Website

https://www.safeguard.com

Safeguard Scientifics Inc is engaged in the development of early- and growth-stage businesses by providing capital and relevant expertise to fuel the growth of an attractive portfolio of technology-enabled healthcare, digital media, and other companies. Safeguard generally promotes the growth and development of these companies through Board representation and minority equity ownership. In addition to supporting the companies, Safeguard's strategy focuses on pursuing monetization opportunities in order to return value to shareholders.

Executives

Satterfield Thomas A Jr	10 percent owner	2609 CALDWELL MILL LN, BIRMINGHAM AL 35243
Beth Michelson	director	C/O CARTESIAN GROWTH CORPORATION II, 505 FIFTH AVENUE, 15TH FLOOR, NEW YORK NY 10017
Ross D Demont	director	51 PICKWICK ROAD, NEWTON MA 02465
Manko Joseph M. Jr.	director	1717 ARCH STREET, 37TH FLOOR, PHILADELPHIA PA 19103
Bob Rosenthal	director	20 NEWBURY ST, BOSTON MA 02116
Mark Herndon	officer: SVP & Chief Financial Officer	C/O SAFEGUARD SCIENTIFICS, INC., 170 N. RADNOR-CHESTER ROAD, SUITE 200, RADNOR PA 19087
Eric Salzman	officer: Chief Restructuring Officer	C/O 8X8 INC., 675 CREEKSIDE WAY, CAMPCALL CA 95008
Ira M Lubert	director	C/O PENN. REAL ESTATE INVESTMENT TRUST, 200 S. BROAD ST., THE BELLEVUE, PHILADEPHIA PA 19102
John Joseph Roberts	director	1007 CANTERBURY LANE, VILLANOVA PA 19085
Brian J Sisko	officer: Senior V.P. & General Counsel	435 DEVON PARK DRIVE, BUILDING 800, WAYNE PA 19087
Russell D Glass	director	170 N. RADNOR-CHESTER ROAD, SUITE 200, RADNOR PA 19087
David A Kille	officer: Senior VP & CFO	C/O SAFEGUARD SCIENTIFICS, INC., 170 N. RADNOR-CHESTER ROAD, SUITE 200, RADNOR PA 19087
Maureen F Morrison	director	C/O ASBURY AUTOMOTIVE GROUP, 2905 PREMIERE PKWY, STE 300, DULUTH GA 30097
Stephen T Zarrilli	officer: Acting Sr VP & Acting CFO	FIBERLINK COMMUNICATIONS CORP., 794 PENLLYN PIKE, BLUE BELL PA 19422
Andrew E Lietz	director	P O BOX 738, RYE NH 03870