STR Holdings (STR Holdings) Predictability Rank

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What is STR Holdings 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.

STR Holdings 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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STR Holdings (STR Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » STR Holdings Inc (OTCPK:STRI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

10 Water Street, Enfield, CT, USA, 06082

Website

https://www.strsolar.com

STR Holdings Inc is a U.S based holding company. It is a provider of encapsulants to the solar industry. Encapsulant is a component used to protect solar cells and hold solar modules together. It has developed ethylene-vinyl acetate (EVA)-based encapsulants for use in commercial solar module manufacturing. The company's encapsulant formulations offer a range of properties and processing attributes, including various curing times and temperatures that align with the requirements of its customers' individual lamination processes and module constructions.

Executives

John A. Janitz	director	6644 CORNERSTONE LANE, ROCHESTER HILLS MI 48306
Andrew M Leitch	director	6615 CALLE PONTE BELLA, RANCHO SANTA FE CA 92091
Andrew Africk	director
Alan N Forman	officer: Senior VP & Gen. Counsel	21255 BURBANK BOULEVARD, SUITE 400, WOODLAND HILLS CA 91367
Riley Investment Management Llc	10 percent owner	11100 SANTA MONICA BLVD., SUITE 810, LOS ANGELES CA 90025
Riley Investment Partners Lp	10 percent owner	11100 SANTA MONICA BLVD STE 810, LOS ANGELES CA 90025
Dominick Schiano	director	30275 OAKLEAF LANE, FRANKLIN MI 48025
B. Riley & Co., Llc	10 percent owner	11100 SANTA MONICA BLVD., STE. 800, LOS ANGELES CA 90025
Bryant R Riley	10 percent owner	C/O B. RILEY FINANCIAL, INC., 21255 BURBANK BLVD, SUITE 400, WOODLAND HILLS CA 91367
Suisse Ag/ Credit	10 percent owner	PARADEPLATZ 8, ZURICH V8 CH 8001
Susan C Schnabel	director	C/O CREDIT SUISSE FIRST BOSTON, 11 MADISON AVE, NEW YORK NY 10010
Red Mountain Partners, L.p.	10 percent owner	10100 SANTA MONICA BOULEVARD, SUITE 925, LOS ANGELES CA 90067
Red Mountain Capital Management Inc	other: Please refer to Remarks below.	10100 SANTA MONICA BOULEVARD, SUITE 925, LOS ANGELES CA 90067
Rmcp Gp Llc	other: Please refer to Remarks below.	1999 AVENUE OF THE STARS, SUITE 1100, LOS ANGELES CA 90067
Red Mountain Capital Partners Llc	other: Please refer to Remarks below.	1999 AVENUE OF THE STARS, SUITE 1100, LOS ANGELES CA 90067