Torrid Holdings (Torrid Holdings) Predictability Rank

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What is Torrid Holdings 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.

Torrid Holdings 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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Torrid Holdings (Torrid Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Torrid Holdings Inc (NYSE:CURV) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

18501 East San Jose Avenue, City of Industry, CA, USA, 91748

Website

https://www.torrid.com

Torrid Holdings Inc is a direct-to-consumer brand of apparel, intimates and accessories in North America targeting the 25- to 40-year old woman. It is focused on fit and offers high quality products across a broad assortment that includes tops, bottoms, denim, dresses, intimates, activewear, footwear and accessories. The company has one reportable segment, which includes the operation of e-Commerce platform and stores.

Executives

Valeria Rico Nikolov	director	C/O TORRID HOLDINGS INC., 18501 EAST SAN JOSE AVENUE, CITY OF INDUSTRY CA 91748
Mark Mizicko	officer: Chief Commercial Officer	18305 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
Paula Dempsey	officer: See Remarks	18501 EAST SAN JOSE AVENUE, CITY OF INDUSTRY CA 91748
Theo Killion	director	C/O TOMMY HILFIGER U.S.A., INC., 25 W. 39TH STREET, NEW YORK NY 10018
Bridgett C. Zeterberg	officer: See Remarks	18501 E. SAN JOSE AVENUE, CITY OF INDUSTRY CA 91748
Timothy O Martin	officer: See Remarks	AMGEN INC, ONE AMGEN CENTER DRIVE, THOUSAND OAKS CA 91320-1799
Michael A Shaffer	director	C/O PHILLIPS-VAN HEUSEN CORPORATION, 200 MADISON AVENUE, NEW YORK NY 10016
Chinwe Abaelu	officer: See Remarks	C/O TORRID INC., 18501 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
Tanner Macdiarmid	officer: See Remarks	C/O TORRID INC., 18501 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
Kelly Mcguire Diehl	officer: See Remarks	C/O TORRID INC., 18501 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
Anne Stephenson	officer: See Remarks	C/O TORRID INC., 18501 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
Elizabeth Munoz	director, officer: Chief Executive Officer	C/O TORRID INC., 18501 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
Michael Robert Salmon	officer: Chief Operating Officer	C/O TORRID INC., 18501 E. SAN JOSE AVE., CITY OF INDUSTRY CA 91748
George Wehlitz	officer: Chief Financial Officer	C/O TORRID HOLDINGS, 18501 EAST SAN JOSE AVENUE, CITY OF INDUSTRY CA 91748
Sycamore Partners Torrid, L.l.c.	10 percent owner	9 W. 57TH STREET, 31ST FLOOR, NEW YORK NY 10019