Equitrans Midstream (Equitrans Midstream) Predictability Rank

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What is Equitrans Midstream 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.

Equitrans Midstream 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

Equitrans Midstream Predictability Rank Related Terms

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Equitrans Midstream (Equitrans Midstream) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Equitrans Midstream Corp (NYSE:ETRN) » Definitions » Predictability Rank

Comparable Companies

PAGP STNG CEQP FRO HEP DTM GLNG INSW NS VNOM TSX:ENB EPD WMB ET LNG OKE MPLX KMI TSX:TRP CQP

Traded in Other Exchanges

37W:Germany

Address

2200 Energy Drive, Canonsburg, PA, USA, 15317

Website

https://www.equitransmidstream.com

Equitrans acquired EQM Midstream in mid-2020, consolidating the midstream family. Equitrans now own EQM assets directly versus just unit ownership. EQM Midstream provides gathering, transmission, and water services to primarily Appalachian producers in Pennsylvania, West Virginia, and Ohio.

Executives

Vicky A Bailey	director	2099 PENNSYLVANIA AVNUE, NW, SUITE 1000, WASHINGTON DC 20006
Kirk R Oliver	officer: Sr VP & CFO	1601 BRYAN STREET, DALLAS TX 75201
Stephen M Moore	officer: Sr VP & General Counsel	2200 ENERGY DRIVE, CANONSBURG PA 15317
Thomas F Karam	officer: President & CEO	C/O SOUTHERN UNION CO, ONE PEI CENTER, WILKES BARRE PA 18711-0601
Patricia K Collawn	director	414 SILVER AVE SW MS 1275, ALBUQUERQUE NM 87102-3289
Kenneth Michael Burke	director	11742 RIVERVIEW DRIVE, HOUSTON TX 77007
Diana M Charletta	officer: EVP & Chief Operating Officer	2200 ENERGY DRIVE, CANONSBURG PA 15317
Sarah Morrison Barpoulis	director	SOUTH JERSEY INDUSTRIES, 1 SOUTH JERSEY PLAZA, FOLSOM NJ 08037
D Mark Leland	director	333 CLAY STREET, SUITE 2400, HOUSTON TX 77002
Margaret K Dorman	director	C/O SMITH INTERNATIONAL INC, PO BOX 60068, HOUSTON TX 77205
Brian P. Pietrandrea	officer: Controller	2200 ENERGY DRIVE, CANONSBURG PA 15317
David L Porges	director	700 UNIVERSE BLVD, C/O NEXTERA ENERGY, INC., JUNO BEACH FL 33408
Robert F Vagt	director	5300 MEMORIAL DR, STE 800, HOUSTON TX 77007
Phillip D. Swisher	officer: VP & Chief Accounting Officer	625 LIBERTY AVENUE, SUITE 2000, PITTSBURGH PA 15222
Norman J Szydlowski	director	6120 S. YALE, SUITE 700, TULSA OK 74136