Generation Bio Co (Generation Bio Co) Predictability Rank

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What is Generation Bio Co 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.

Generation Bio Co 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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Generation Bio Co (Generation Bio Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Generation Bio Co (NAS:GBIO) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

301 Binney Street, Cambridge, MA, USA, 02142

Website

https://www.generationbio.com

Generation Bio Co is a genetics medicine company that is focused on creating gene therapies to provide durable and redosable treatments for patients suffering from rare and untreated diseases. The company focuses on liver and retina related diseases.

Executives

Dannielle Appelhans	director	C/O RUBIUS THERAPEUTICS, INC., 399 BINNEY STREET, SUITE 300, CAMBRIDGE MA 02139
Rowland Charles A Jr	director	3338 LANCASHIRE RD, FURLONG PA 18925
Donald William Nicholson	director	C/O GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142
Anthony G. Quinn	director	C/O AEGLEA BIOTHERAPEUTICS, INC., 901 S. MOPAC EXPWY, STE. 250, AUSTIN TX 78746
Antoinette Paone	officer: CHIEF OPERATING OFFICER	C/O GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142
Yalonda Howze	officer: CHIEF LEGAL OFFICER	C/O CODIAK BIOSCIENCES, INC., 35 CAMBRIDGEPARK DRIVE, SUITE 500, CAMBRIDGE MA 02140
Phillip Samayoa	officer: CHIEF STRATEGY OFFICER	C/O GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142
Jason P Rhodes	director	C/O EPIZYME, INC., 400 TECHNOLOGY SQUARE, 4TH FLOOR, CAMBRIDGE MA 02139
Atlas Venture Associates X, L.p.	10 percent owner	400 TECHNOLOGY SQ., 10TH FLOOR, CAMBRIDGE MA 02139
Matthew Stanton	officer: Chief Scientific Officer	C/O GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142
Douglas Kerr	officer: Chief Development Officer	C/O GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142
Geoff Mcdonough	director, 10 percent owner, officer: See Remarks	C/O SURFACE ONCOLOGY, INC., 50 HAMPSHIRE ST., 8TH FLOOR, CAMBRIDGE MA 02139
Tracy Zimmermann	officer: Chief Development Officer	C/O GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142
Cooper Ronald Harold Wilfred	director	C/O GENOCEA BIOSCIENCES, INC., 100 ACORN PARK DRIVE, 5TH FLOOR, CAMBRIDGE MA 02140
Mark D. Angelino	officer: Chief Operating Officer	GENERATION BIO CO., 301 BINNEY STREET, SUITE 401, CAMBRIDGE MA 02142