Equity Bancshares (Equity Bancshares) Predictability Rank

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What is Equity Bancshares 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.

Equity Bancshares 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

Equity Bancshares Predictability Rank Related Terms

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Equity Bancshares (Equity Bancshares) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Equity Bancshares Inc (NYSE:EQBK) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

44X:Germany

Address

7701 East Kellogg Drive, Suite 300, Wichita, KS, USA, 67207

Website

https://investor.equitybank.com

Equity Bancshares Inc is a bank holding company. The company's operations involve the delivery of loan and deposit products to customers. The majority of the Company's revenues come from interest income on financial instruments, including loans, leases, securities and derivatives. The company also earns revenue from Non-interest income which includes Service charges and fees, Debit card income, Investment Referral Income, Trust Income and Insurance Sales Commissions.

Executives

James S Loving	director	C/O CHS INC., 5500 CENEX DRIVE, INVER GROVE HEIGHTS MN 55077
Krzysztof Slupkowski	officer: Chief Credit Officer	7701 EAST KELLOGG DRIVE, SUITE 300, WICHITA KS 67207
Chris M Navratil	officer: Chief Financial Officer	7701 EAST KELLOGG DRIVE, SUITE 300, WICHITA KS 67207
David Pass	officer: Chief Information Officer	821 17TH STREET, DENVER CO 80202
Ann Knutson	officer: Chief Human Resources Officer	7701 EAST KELLOGG DRIVE, SUITE 300, WICHITA KS 67207
Richard M Sems	officer: President	7701 EAST KELLOGG DRIVE, SUITE 300, WICHITA KS 67207
Gary C Allerheiligen	director	7701 EAST KELLOGG DRIVE, SUITE 200, WICHITA KS 67207
Gregory L Gaeddert	director	7701 EAST KELLOGG DRIVE, SUITE 200, WICHITA KS 67207
Eric R Newell	officer: Chief Financial Officer	7701 E. KELLOGG, SUITE 300, WICHITA KS 67207
Julie A Huber	officer: EVP and Chief Credit Officer	7701 EAST KELLOGG DRIVE, SUITE 200, WICHITA KS 67207
Brett A Reber	officer: General Counsel	7701 EAST KELLOGG DRIVE, SUITE 300, WICHITA KS 67207
Craig L Anderson	officer: Chief Operating Officer	1670 BROADWAY, DENVER CO 80202
Edwin G Lawson	officer: Chief Information Officer	7701 EAST KELLOGG DRIVE, SUITE 300, WICHITA KS 67207
Gregory H Kossover	director, officer: EVP and CFO	7701 EAST KELLOGG DRIVE, SUITE 200, WICHITA KS 67207
Brad S Elliott	director, officer: Chief Executive Officer	7701 EAST KELLOGG DRIVE, SUITE 200, WICHITA KS 67207