Berkshire Hills Bancorp (Berkshire Hills Bancorp) Predictability Rank

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What is Berkshire Hills Bancorp 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.

Berkshire Hills Bancorp 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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Berkshire Hills Bancorp (Berkshire Hills Bancorp) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Berkshire Hills Bancorp Inc (NYSE:BHLB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

4I9:Germany

Address

60 State Street, Boston, MA, USA, 02109

Website

https://www.berkshirebank.com

Berkshire Hills Bancorp Inc is a holding company. It offers deposit, lending, investment, wealth management, and insurance services.

Executives

Mary Anne Callahan	director	24 NORTH STREET, PITTSFIELD MA 01201
Nitin J. Mhatre	director, officer: President and CEO	24 NORTH STREET, PITTSFIELD MA 01201
Karyn Polito	director	24 NORTH STREET, PITTSFIELD MA 01201
Jacqueline Courtwright	officer: EVP,Chief HR & Culture Officer	24 NORTH STREET, PITTSFIELD MA 01201
Kevin Conn	officer: SVP, Investors & Corp. Devel	24 NORTH STREET, PITTSFIELD MA 01201
Eric S Rosengren	director	24 NORTH STREET, PITTSFIELD MA 01201
Brett Brbovic	officer: Sr Managing Dir and CAO	24 NORTH STREET, PITTSFIELD MA 01201
R David Rosato	officer: SEVP - Chief Financial Officer	24 NORTH STREET, PITTSFIELD MA 01201
Ashlee Picard Flores	officer: EVP -Chief Compliance Officer	24 NORTH STREET, PITTSFIELD MA 01201
James Cannon Brown	officer: SEVP-Head of Comm'l Banking	24 NORTH STREET, PITTSFIELD MA 01201
Philip Jurgeleit	officer: EVP - Chief Credit Officer	24 NORTH STREET, PITTSFIELD MA 01201
Wm Gordon Prescott	officer: SEVP and General Counsel	24 NORTH STREET, PITTSFIELD MA 01201
Michael Zaitzeff	director	C/O HOLDCO ASSET MANAGEMENT, LP, 441 LEXINGTON AVENUE, 15TH FLOOR, NEW YORK NY 10017
Hughes William H Iii	director	24 NORTH STREET, PITTSFIELD MA 01201
Mihir A. Desai	director	24 NORTH STREET, PITTSFIELD MA 01201