Helios Technologies (Helios Technologies) Predictability Rank

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What is Helios Technologies 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.

Helios Technologies 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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Helios Technologies (Helios Technologies) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Helios Technologies Inc (NYSE:HLIO) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

SH7:Germany

Address

7456 16th Street E, Sarasota, FL, USA, 34243

Website

https://www.heliostechnologies.com

Helios Technologies Inc is a United States-based industrial technology company that develops, manufactures, and markets solutions for the hydraulics and electronics markets. It operates under two business segments: Hydraulics and Electronics. The Hydraulics segment designs and manufactures hydraulic cartridge valves, hydraulic quick release couplings as well as engineers complete hydraulic systems. The Electronics segment designs and manufactures customized electronic controls systems and displays for a variety of end markets including industrial and mobile, recreational and health and wellness.

Executives

Sean Bagan	officer: Chief Financial Officer	C/O HELIOS TECHNOLOGIES, INC., 7456 16TH STREET EAST, SARASOTA FL 34243
Philippe Lemaitre	director	7456 16TH STREET EAST, SARASOTA FL 34243
Frederick Joseph Martich	officer: Pres. of Hydraulics, Americas	C/O HELIOS TECHNOLOGIES, INC., 7456 16TH ST E, SARASOTA FL 34243
Lee Francis Wichlacz	officer: President, Electronics	C/O HELIOS TECHNOLOGIES, INC., 7456 16TH ST E, SARASOTA FL 34243
Diana Sacchi	director	2227 WELBILT BLVD, NEW PORT RICHEY FL 34655
Marc A Greenberg	officer: General Counsel and Secretary	7456 16TH STREET EAST, SARASOTA FL 34243
Melanie M Nealis	officer: Chief Legal & Compliance Offic	7456 16TH STREET EAST, SARASOTA FL 34243
Marc Bertoneche	director	7456 16TH STREET EAST, SARASOTA FL 33316
Tricia L Fulton	officer: Chief Financial Officer	7456 16TH STREET EAST, SARASOTA FL 34243
Matteo Arduini	officer: Officer	7456 16TH STREET EAST, SARASOTA FL 34243
Jason Lemar Morgan	officer: President, CVT	1500 WEST UNIVERSITY PKWY, SARASOTA FL 34243
Josef Matosevic	officer: President and CEO	1500 WEST UNIVERSITY PARKWAY, SARASOTA FL 34243
Cary Chenanda	director	7456 16TH STREET EAST, SARASOTA FL 34243
Gregory C Yadley	director	101 E. KENNEDY BLVD., SUITE 2800, TAMPA FL 33602
Alexander Schuetz	director	7456 16TH STREET EAST, SARASOTA FL 34243