What is Select Water Solutions 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.
Select Water Solutions 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
Also read:
Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety
Select Water Solutions (Select Water Solutions) Business Description
Traded in Other Exchanges
Address
1233 West Loop South, Suite 1400, Houston, TX, USA, 77027
Select Water Solutions Inc provides sustainable water and chemical solutions to the energy industry. These solutions are supported by the company's critical water infrastructure assets, chemical manufacturing, and water treatment and recycling capabilities.
Executives
| Brian Szymanski |
officer: Chief Accounting Officer & VP |
1820 I-35 FRONTAGE ROAD, GAINESVILLE TX 76240 |
| Michael Skarke |
officer: Exec. VP, Water Solutions |
1820 NORTH I-35, P.O. BOX 1715, GAINESVILLE TX 76241 |
| Troy W Thacker |
director |
C/O FOX PAINE & CO, 950 TOWER LANE, FOSTER CITY CA 94404 |
| Christina M Ibrahim |
officer: SVP, GC and CCO |
2000 ST. JAMES PLACE, HOUSTON TX 77056 |
| Nick L Swyka |
officer: CFO & Senior VP |
515 POST OAK BLVD., STE. 200, HOUSTON TX 77027 |
| Robin H Fielder |
director |
1201 LAKE ROBBINS DRIVE, THE WOODLANDS TX 77380 |
| Christopher Kile George |
officer: See Remarks |
5660 WICKERSHAM LN, HOUSTON TX 77056 |
| Luis M Fernandez-moreno |
director |
ASHLAND INC., 8145 BLAZER DRIVE, WILMINGTON DE 19808 |
| Suzanne Colbert |
officer: Chief Technology Officer |
1233 WEST LOOP SOUTH, SUITE 1400, HOUSTON TX 77027 |
| Gayle Burleson |
director |
ONE CONCHO CENTER, 600 WEST ILLINOIS AVENUE, MIDLAND TX 79701 |
| Scf-vii(a), L.p. |
10 percent owner, other: Member of Group |
600 TRAVIS ST., STE. 6600, HOUSTON TX 77002 |
| Scf Partners, Inc. |
10 percent owner, other: Member of Group |
600 TRAVIS STE 6600, HOUSTON TX 77002 |
| Scf-vii(a), G.p., Limited Partnership |
10 percent owner, other: Member of Group |
600 TRAVIS, SUITE 6600, HOUSTON TX 77002 |
| Holli C. Ladhani |
director, officer: President and CEO |
2800 POST OAK BLVD., SUITE 4500, HOUSTON TX 77056 |
| Mitchell Shauf |
officer: EVP, Water Services |
1820 N. INTERSTATE 35, GAINESVILLE TX 76241 |
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