CymaBay Therapeutics (CymaBay Therapeutics) Predictability Rank

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What is CymaBay Therapeutics 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.

CymaBay Therapeutics 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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CymaBay Therapeutics (CymaBay Therapeutics) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » CymaBay Therapeutics Inc (NAS:CBAY) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

C0I:Germany

Address

7575 Gateway Boulevard, Suite 110, Newark, CA, USA, 94560

Website

https://www.cymabay.com

CymaBay Therapeutics Inc is a clinical-stage biopharmaceutical company focused on developing innovative therapies for patients with liver and other chronic diseases with high unmet medical need. Its product in pipeline includes two clinical stage product candidates: seladelpar (a PPARd agonist) and MBX-2982 (a GPR119 agonist).

Executives

Charles Mcwherter	officer: Chief Scientific Officer	C/O CYMABAY THERAPEUTICS, INC., 7575 GATEWAY BLVD., SUITE 110, NEWARK CA 94560
Daniel Menold	officer: Vice President, Finance	C/O CYMABAY THERAPEUTICS, INC., 7575 GATEWAY BLVD., SUITE 110, NEWARK CA 94560
Paul T Quinlan	officer: General Counsel	C/O CYMABAY THERAPEUTICS, INC., 7575 GATEWAY BLVD., SUITE 110, NEWARK CA 94560
Janet Dorling	director	C/O ACHAOGEN, INC., 1 TOWER PLACE, SUITE 300, SOUTH SAN FRANCISCO CA 94080
Sujal Shah	director, officer: Chief Executive Officer	C/O CYMABAY THERAPEUTICS, INC., 7575 GATEWAY BLVD., SUITE 110, NEWARK CA 94560
Kurt Von Emster	director	601 GATEWAY BOULEVARD, SUITE 350, SAN FRANCISCO CA 94080
Harish Shantharam	officer: Chief Financial Officer	7575 GATEWAY BLVD, NEWARK CA 94560
Dennis D Kim	officer: Chief Medical Officer	C/O EMERALD BIOSCIENCE, INC., 130 NORTH MARINA DRIVE, LONG BEACH CA 90803
Eric Lefebvre	director	C/O TOBIRA THERAPEUTICS, INC., 701 GATEWAY BOULEVARD, #200, SOUTH SAN FRANCISCO CA 94080
Thomas G Wiggans	director
Lewis J Stuart	officer: Chief Commercial Officer	3172 PORTER DRIVE, PALO ALTO CA 94304
Venbio Select Advisor Llc	10 percent owner	110 GREENE STREET, SUITE 800, NEW YORK NY 10012
Behzad Aghazadeh	10 percent owner	C/O AVORO CAPITAL ADVISORS LLC, 110 GREENE STREET, SUITE 800, NEW YORK NY 10012
Carl Goldfischer	director	161 WEST 61ST STREET, NEW YORK NY 10022
Robert James Wills	director	175 TOYOTA PLAZA, 7TH FLOOR, MEMPHIS TN 38103