Truist Financial (Truist Financial) Predictability Rank

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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.

Truist Financial 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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Truist Financial (Truist Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Truist Financial Corp (NYSE:TFC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

TFCpR.PFD:USA TFCpO.PFD:USA TFCpI.PFD:USA TFC:Mexico 1TFC:Italy BBK:Germany BBK:Germany B1BT34:Brazil TFC:Austria

Address

214 North Tryon Street, Charlotte, NC, USA, 28202

Website

https://www.truist.com

Based in Charlotte, North Carolina, Truist is the combination of BB&T and SunTrust. Truist is a regional bank with a presence primarily in the Southeastern United States. In addition to commercial banking, retail banking, and investment banking operations, the company operates several nonbank segments, the primary one being its insurance brokerage business.

Executives

Rogers William H Jr	officer: President and COO	214 N TRYON STREET, CHARLOTTE NC 28202
Charles A Patton	director	214 N TRYON STREET, CHARLOTTE NC 28202
David M Ratcliffe	director	214 N TRYON STREET, CHARLOTTE NC 28202
Steven C Voorhees	director	214 N TRYON STREET, CHARLOTTE NC 28202
Kelly S King	officer: President- BB&T Corporation	214 N TRYON STREET, CHARLOTTE NC 28202
Denise M Demaio	officer: Chief Audit Officer	214 N TRYON STREET, CHARLOTTE NC 28202
Joseph M Thompson	officer: Sr. Executive Vice President	214 N TRYON STREET, CHARLOTTE NC 28202
Michael Baron Maguire	officer: Sr. Executive Vice President	214 N TRYON STREET, CHARLOTTE NC 28202
Cummins Hugh S. Iii	officer: Sr. Executive Vice President	214 N TRYON STREET, CHARLOTTE NC 28202
David Hudson Weaver	officer: Sr. Executive Vice President	214 N TRYON STREET, CHARLOTTE NC 28202
Starnes Clarke R Iii	officer: Sr. Executive Vice President	214 N TRYON STREET, CHARLOTTE NC 28202
Daryl N. Bible	officer: Executive Vice President	214 N TRYON STREET, CHARLOTTE NC 28202
Boyer K. David Jr.	director	214 N TRYON STREET, CHARLOTTE NC 28202
John M Howard	officer: Chief Insurance Officer	214 N TRYON STREET, CHARLOTTE NC 28202
Brantley J Standridge	officer: Sr. Exec. Vice President	214 N TRYON STREET, CHARLOTTE NC 28202