Gulfslope Energy (Gulfslope Energy) Predictability Rank

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What is Gulfslope Energy 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.

Gulfslope Energy 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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Gulfslope Energy (Gulfslope Energy) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Gulfslope Energy Inc (OTCPK:GSPE) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

1000 Main Street, Suite 2300, Houston, TX, USA, 77002

Website

https://www.gulfslope.com

Gulfslope Energy Inc is a part of the oil and gas markets. It is a crude oil and natural gas exploration and production company. The company's activities are focused on the shelf area of the Gulf of Mexico. It is focused on identifying and acquiring oil and gas prospects. It has licensed three-dimensional seismic data and has evaluated this data using interpretation technologies.

Executives

Delek Group, Ltd.	10 percent owner	19 ABBA EBAN BLVD, P.O.B. 2054, HERZLIYA L3 4612001
Itshak Sharon	10 percent owner	7, GIBOREI ISRAEL STREET, P.O.B. 8464, INDUSTRIAL ZONE SOUTH, NETANYA L3 42504
Delek Gom Holdings, Llc	10 percent owner	C/O THE CORPORATION TRUST COMPANY, 1209 ORANGE STREET, WILMINGTON DE 19801
Delek Gom Investments, Llc	10 percent owner	C/O THE CORPORATION TRUST COMPANY, 1209 ORANGE STREET, WILMINGTON DE 19801
Dkl Investments Ltd	10 percent owner	C/O CRESTBRIDGE LIMITED, 47 ESPLANADE, ST HELIER Y9 JE1 0BD
John Malanga	officer: Chief Financial Officer	2500 CITY WEST, SUITE 800, HOUSTON TX 77042
Richard S Langdon	director
Paul L Morris	director	1004 NORTH BIG SPRING STREET, MIDLAND TX 79701
James M. Askew	director, 10 percent owner	3 RIVERWAY, STE. 1800, HOUSTON TX 77056
Brady Douglas Rodgers	officer: VICE PRESIDENT	2500 CITYWEST BLVD, HOUSTON TX 77042
Ronald A Bain	officer: President and COO	1001 FANNIN STREET, HOUSTON TX 77002
Moore Dwight Clint M	officer: Vice President and Secretary	2500 CITY WEST, SUITE 800, HOUSTON TX 77042
John N Seitz	10 percent owner	4203 YOAKUM BLVD, SUITE 100, HOUSTON TX 77006
Connally John B Iii	other: FORMER 10% OWNER	16MARCUS CO, 1600 ROCKCLIFF ROAD, AUSTIN TX 78746
Michael Doolin	10 percent owner	5 PEPPERWOOD DRIVE, SANDY UT 84092