What is Cormedix Predictability Rank?
1 (5)
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.
Cormedix 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
Cormedix (Cormedix) Business Description
Traded in Other Exchanges
Address
300 Connell Drive, Suite 4200, Berkeley Heights, NJ, USA, 07922
Cormedix Inc is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases. The Company's primary focus is to develop its lead product candidate, DefenCath, for potential commercialization in the United States (U.S.) and other key markets.
Executives
| Alan W Dunton |
director |
VICURON PHARMACEUTICALS INC, 455 S GULPH ROAD SUITE 305, KING OF PRUSSIA PA 19406 |
| Erin Mistry |
officer: Chief Commercial Officer |
300 CONNELL DRIVE, SUITE 4200, BERKELEY HEIGHTS NJ 07922 |
| Joseph Todisco |
director, officer: Chief Executive Officer |
400 CROSSING BOULEVARD, BRIDGEWATER NJ 08807 |
| Myron Kaplan |
director |
C/O KLEINBERG, KAPLAN, WOLFF & COHEN, PC, 551 FIFTH AVENUE, 18TH FLOOR, NEW YORK NY 10176 |
| Paulo F Costa |
director |
MACROGENICS, INC., ONE CORPORATE DRIVE, SOUTH SAN FRANCISCO CA 94080 |
| Robert A Stewart |
director |
360 MT. KEMBLE AVENUE, MORRISTOWN NJ 07960 |
| Janet Dillione |
director |
ONE WAYSIDE ROAD, BURLINGTON MA 01803 |
| Matthew T David |
officer: EVP, Chief Financial Officer |
300 CONNELL DRIVE, SUITE 4200, BERKELEY HEIGHTS NJ 07922 |
| Elizabeth Masson |
officer: EVP, Head of Clinical Ops. |
400 CONNELL DRIVE, SUITE 5000, BERKELEY HEIGHTS NJ 07922 |
| Thomas Nusbickel |
officer: EVP, Chief Commercial Officer |
300 CONNELL DRIVE, SUITE 4200, BERKELEY HEIGHTS NJ 07922 |
| Gregory Scott Duncan |
director |
44 MILTON AVENUE, ALPHARETTA GA 30009 |
| Steven W Lefkowitz |
director |
SIX HARRISON STREET, NEW YORK NY 10013 |
| Mehmood Khan |
director |
700 ANDERSON HILL ROAD, PURCHASE NY 10577 |
| Armstrong Jr. John L. |
officer: Exec VP of Tech Operations |
C/O CORMEDIX INC., 1430 U.S. HIGHWAY 206, SUITE 200, BEDMINSTER NJ 07921 |
| Khoso Baluch |
director, officer: Chief Executive Officer |
1430 US HIGHWAY 206, SUITE 200, BEDMINSTER NJ 07921 |
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
CRMD has been successfully added to your