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Alta Equipment Group (Alta Equipment Group) Predictability Rank


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What is Alta Equipment Group 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.

Alta Equipment Group 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Alta Equipment Group Predictability Rank Related Terms

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Alta Equipment Group (Alta Equipment Group) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Alta Equipment Group Inc (NYSE:ALTG) » Definitions » Predictability Rank
Comparable Companies
WLFC AAN BEBE FPAY MPU MWG BRDS DWAY YAYO GSL URI LSE:AHT AER BSP:RENT3 UHAL WSC CAR XPAR:ALD TSX:EFN TSE:8439
Traded in Other Exchanges
ALTGpA.PFD:USA
Address
13211 Merriman Road, Livonia, MI, USA, 48150
Website
https://www.altaequipment.com
Alta Equipment Group Inc is an integrated equipment dealership platform in the U.S. Its segments are Material Handling and Construction Equipment. The Material Handling segment is engaged in operations related to the sale, service, and rental of lift trucks in Michigan, Illinois, Indiana, New York, Virginia, and throughout the New England states whereas, the Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Indiana, Illinois, Ohio, New York, Florida and throughout the New England States.
Executives
Zachary E. Savas director 3250 W. BIG BEAVER ROAD, SUITE 544, TROY MI 48084
Ryan Greenawalt director, 10 percent owner, officer: CEO, Chairman C/O ALTA EQUIPMENT GROUP INC., 13211 MERRIMAN RD, LIVONIA MI 48150
Andrew P Studdert director PO BOX 66100 - WHQLD, CHICAGO IL 60666
Daniel Shribman director 299 PARK AVENUE, NEW YORK NY 10171
B. Riley Financial, Inc. 10 percent owner 11100 SANTA MONICA BLVD, SUITE 800, LOS ANGELES CA 90025
Brf Investments, Llc 10 percent owner 11100 SANTA MONICA BLVD., SUITE 800, LOS ANGELES CA 90025
Craig Brubaker officer: Chief Operating Officer C/O ALTA EQUIPMENT GROUP INC., 13211 MERRIMAN ROAD, LIVONIA MI 48150
Anthony Colucci officer: Chief Financial Officer C/O ALTA EQUIPMENT GROUP INC., 13211 MERRIMAN RD, LIVONIA MI 48150
Katherine E White director ONE MAIN STREET, EVANSVILLE IN 47708
B. Riley Principal Investments, Llc 10 percent owner 11100 SANTA MONICA BLVD., SUITE 800, LOS ANGELES CA 90025
James L Kempner director C/O LAZARD FRERES & CO. LLC, 30 ROCKEFELLER PLAZA, NEW YORK NY 10020
Bryant R Riley director C/O B. RILEY FINANCIAL, INC., 21255 BURBANK BLVD, SUITE 400, WOODLAND HILLS CA 91367
Brc Partners Management Gp, Llc 10 percent owner 11100 SANTA MONICA BLVD SUITE 800, LOS ANGELES CA 90025
B. Riley Capital Management, Llc 10 percent owner 11100 SANTA MONICA BLVD., SUITE 800, LOS ANGELES CA 90025
Brc Partners Opportunity Fund, Lp 10 percent owner 11100 SANTA MONICA BLVD. SUITE 800, LOS ANGELES CA 90025