Crossroads Impact (Crossroads Impact) Predictability Rank

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What is Crossroads Impact 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.

Crossroads Impact 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

Crossroads Impact Predictability Rank Related Terms

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Crossroads Impact (Crossroads Impact) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Crossroads Impact Corp (OTCPK:CRDSQ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

4514 Cole Avenue, Suite 1600, Dallas, TX, USA, 75205

Website

https://www.crossroads.com

Crossroads Impact Corp is a holding company. The company is focused on investing in businesses that promote economic vitality and community development.

Executives

Claire Gogel	director	C/O SUNEDISON, INC., 13736 RIVERPORT DRIVE, SUITE 180, MARYLAND HEIGHTS MO 63043
210/crds Investment Llc	10 percent owner, other: See Explanation of Responses	8214 WESTCHESTER DRIVE, SUITE 950, DALLAS TX 75225
C Clark Webb	director, other: See Explanation of Responses	8214 WESTCHESTER DRIVE, SUITE 950, DALLAS TX 75225
Robert H Alpert	director, other: See Explanation of Responses	8214 WESTCHESTER DRIVE, SUITE 950, DALLAS TX 75225
210 Capital, Llc	other: See Explanation of Responses	8214 WESTCHESTER DRIVE, SUITE 950, DALLAS TX 75225
Lone Star Value Co-invest I, Lp	other: See Footnote 1	53 FOREST AVENUE, 1ST FLOOR, OLD GREENWICH CT 06870
Lone Star Value Management Llc	other: See Footnote 1	53 FOREST AVENUE, 1ST FLOOR, OLD GREENWICH CT 06870
Lone Star Value Investors Gp Llc	other: See Footnote 1	53 FOREST AVENUE, 1ST FLOOR, OLD GREENWICH CT 06870
Lone Star Value Investors Lp	other: See Footnote 1	53 FOREST AVENUE, 1ST FLOOR, OLD GREENWICH CT 06870
Jeffrey E. Eberwein	other: See Footnote 1	53 FOREST AVENUE, SUITE 101, OLD GREENWICH CT 06870
Coleman Richard Kenneth Jr.	director, officer: Executive Director	53 FOREST AVE, SUITE 101, OLD GREENWICH CT 06870
Jennifer Crane	officer: Chief Financial Officer	11000 N. MOPAC EXPRESSWAY, AUSTIN TX 78759
Mark C Hood	officer: Executive Vice President	C/O CROSSROADS SYSTEMS, INC., 11000 N. MOPAC EXPRESSWAY #150, AUSTIN TX 78759
Robert G. Pearse	director	100 CANAL POINTE BLVD., SUITE 108, PRINCETON NJ 08540
Don Pearce	director	11000 N. MOPAC, AUSTIN TX 78759