What is The Coretec Group Predictability Rank?
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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.
The Coretec 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
| 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
The Coretec Group (The Coretec Group) Business Description
Traded in Other Exchanges
N/A
Address
600 South Wagner Road, Ann Arbor, MI, USA, 48103
The Coretec Group Inc is technology company. The company is currently developing, testing, and providing new and/or improved technologies, products, and service solutions for energy-related industries including, but not limited to oil/gas, renewable energy, and distributed energy industries. Many of these technologies and products also have applications for medical, electronic, photonic, display, and lighting markets among others. The company's product portfolio includes Endurion, Coretec HexaSilane, CSpace, and other Technologies which are based on the production of silicon products.
Executives
| Victor F Keen |
director |
C/O RESEARCH FRONTIERS INC., 240 CROSSWAYS PARK DRIVE, WOODBURY NY 11797 |
| Simon Calton |
director, 10 percent owner |
C/O 3DICON CORPORATION, 505 BROADWAY, S. 208, FARGO ND 58102 |
| Matthew Joseph Kappers |
director, officer: Chief Executive Officer |
C/O AMPLITECH GROUP, INC, 155 PLANT AVENUE, HAUPPAUGE NY 11788 |
| Matthew Leo Hoffman |
officer: Chief Financial Officer |
333 JACKSON PLAZA, SUITE 1200, ANN ARBOR MI 48103 |
| Michael Anthony Kraft |
officer: Chief Executive Officer |
3169 REDHILL AVENUE, COSTA MESA CA 92626 |
| Dennis Keith Anderson |
director, 10 percent owner |
C/O 3DICON CORPORATION, 505 BROADWAY, S. 208, FARGO ND 58102 |
| Ronald Dombrowski |
director |
C/O 3DICON CORPORATION, 505 BROADWAY, S. 208, FARGO ND 58102 |
| Doug Freitag |
director, officer: Chief Executive Officer |
C/O 3DICON CORPORATION, 505 BROADWAY, S.208, FARGO ND 58102 |
| Ronald Wayne Robinson |
officer: Chief Financial Officer |
6804 SOUTH CANTON AVENUE, SUITE 150, TULSA OK 74136 |
| Anthony Martin Keating |
director |
7507 SOUTH SANDUSKY AVENUE, TULSA OK 74136 |
| John Michael Oconnor |
director |
2828 E. 34, TULSA OK 74105 |
| Chris Dunstan |
officer: Chief Financial Officer |
|
| Sidney A Aroesty |
director |
DIAGNOSTIC PRODUCTS CORP, 5700 WEST 96TH STREET, LOS ANGELES CA 90045 |
| Keating Judith Faye Snider |
other: Corporate Secretary |
7507 SOUTH SANDUSKY AVENUE, TULSA OK 74136 |
| Mark G Willner |
officer: Chief Executive Officer |
543 MONROE STREET, DENVER CO 80206 |
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