Skkynet Cloud Systems (Skkynet Cloud Systems) Predictability Rank

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What is Skkynet Cloud Systems 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.

Skkynet Cloud Systems 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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Skkynet Cloud Systems (Skkynet Cloud Systems) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Skkynet Cloud Systems Inc (OTCPK:SKKY) » Definitions » Predictability Rank

Comparable Companies

CISO VRAR JG VHC SOS CLOQ SDCH RVYL TGCB OLB MSFT ORCL ADBE PANW SNPS VMW FTNT CRWD PLTR SPLK

Traded in Other Exchanges

N/A

Address

2233 Argentina Road, Suite 302, Mississauga, ON, CAN, L5N 2X7

Website

https://www.skkynet.com

Skkynet Cloud Systems Inc is an industrial middleware vendor company. It provides connectivity and data acquisition to a wide variety of industrial and office hardware and software products. The company's Skkynet Connected Systems platform includes the SkkyHub service, DataHub, Skkynet Vine, and Embedded Toolkit software. The platform enables real-time data connectivity for industrial, embedded, and financial systems. The company provides three types of cloud services: remotely hosted cloud systems and locally hosted cloud systems or a hybrid of the two. The business serves North America, Europe, Asia Pacific, and South America globally.

Executives

Andrew S Thomas	director, 10 percent owner, officer: Chief Executive Officer	2233 ARGENTIA ROAD, SUITE 302, MISSISSAUGA A6 L5N 2X7
Paul Benford	director, 10 percent owner, officer: Chief Operating Officer	2233 ARGENTIA ROAD, SUITE 302, MISSISSAUGA A6 L5N 2X7
Lowell Thomas Holden	officer: Chief Financial Officer	631 US HWY 1, SUITE 407, NORTH PALM BEACH FL 33408
Paul E Thomas	director, 10 percent owner, officer: President	2233 ARGENTIA ROAD, SUITE 302, MISSISSAUGA A6 L5N 2X7
Xavier Eric Mesrobian	officer: VP Sales and Marketing	2233 ARGENTIA ROAD, SUITE 302, MISSISSAUGA A6 L5N 2X7
John X Adiletta	director	51 BOULDERWOOD DRIVE, BERNARDSVILLE NJ 07924
Kenneth W. Jennings	director	2233 ARGENTIA ROAD, SUITE 302, MISSISSAUGA A6 L5N 2X7
Norman Evans	director	5650 TOMKEN RD., UNIT 16, MISSISSAUGA A6 L4W 4P1
Michael R Thomas	other: Advisor	2233 ARGENTIA ROAD, SUITE 306, MISSISSAUGA A6 L5N 2X7