Standex International (Standex International) Predictability Rank

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What is Standex International 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.

Standex International 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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Standex International (Standex International) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Standex International Corp (NYSE:SXI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

9SI:Germany

Address

23 Keewaydin Drive, Salem, NH, USA, 03079

Website

https://www.standex.com

Standex International Corp is a us-based firm. It engages in manufacturing a variety of products and services for several commercial and industrial markets. It has five segments that include Electronics; Engraving; Scientific; Engineering Technologies and Specialty Solutions. With its business spread majorly in the United States, most of the company revenues come from the Electronics business that primarily includes manufacturing and selling of electronic components for applications throughout the end-user market spectrum.

Executives

Ademir Sarcevic	officer: Vice President/CFO/Treasurer	5500 WAYZATA BOULEVARD, MINNEAPOLIS MN 55416
Barbara Joanne Edwards	director	11 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
Sean C Valashinas	officer: Chief Accounting Officer	C/O STANDEX INTERNATIONAL CORPORATION, 11 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
Alan J Glass	officer: Vice President/CLO
Thomas E Chorman	director
David A. Dunbar	director, officer: President/CEO	11 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
Paul C. Burns	other: Vice President Corporate Devel	11 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
Cannon Charles H Jr	director	200 E RANDOLPH DRIVE, CHICAGO IL 60601
Thomas J Hansen	director	3600 W. LAKE AVENUE, GLENVIEW IL 60026-1215
Maschera Flavio	officer: Vice President/Chief Innovatio	23 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
Robin J Davenport	director	23 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
James A. Hooven	officer: VP Operations & Supply Chain	ONE BATESVILLE BOULEVARD, BATESVILLE IN 47006
Annemarie Bell	officer: Vice President Human Resources	11 KEEWAYDIN DRIVE, SUITE 300, SALEM NH 03079
Thomas D. Debyle	Chief Financial Officer, other: Insider	STANDEX INT'L, 6 MANOR PARKWAY, SALEM NH 03079
Gerald H Fickenscher	director	199 BENSON RD, MIDDLEBURY CT 06749