What is Burke & Herbert Financial Services 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.
Burke & Herbert Financial Services 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
Burke & Herbert Financial Services (Burke & Herbert Financial Services) Business Description
Traded in Other Exchanges
N/A
Address
100 S Fairfax Street, Alexandria, VA, USA, 22314
Burke & Herbert Financial Services Corp is the bank holding company. The bank offers a full range of business and personal financial solutions designed to meet customers' banking, borrowing, and investment needs and has over 20 branches throughout the Northern Virginia region and commercial loan offices in Fredericksburg, Loudoun County, and Richmond, Virginia, and in Bethesda, Maryland.
Executives
| Barnwell Julian Forrest Jr. |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Shawn Patrick Mclaughlin |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| David P Boyle |
director, officer: Chair, President, & CEO |
5151 COLUMBUS RD, WOOSTER OH 44691 |
| Jose David Riojas |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Mark Guthrie Anderson |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Nicholas Iii Carosi |
director |
22900 SHAW ROAD, SUITE 111, STERLING VA 20166 |
| Shannon Barrow Rowan |
officer: EVP, Wealth Services |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Hinson Samuel Laing Iii |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Smith Kendrick Cook |
officer: EVP, Operations |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Katherine Diane Bonnafe |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Edmund Hunt Burke |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Michael David Lubeley |
director |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Jennifer Palmer Schmidt |
officer: EVP, Enterprise Risk |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Joseph Frye Collum |
officer: Executive Vice President |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
| Emily Stavroula Debeniotis |
officer: EVP, Human Resources |
C/O BURKE & HERBERT FINANCIAL SERVICES, 100 S. FAIRFAX STREET, ALEXANDRIA VA 22314 |
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