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CIMC Vehicles (Group) Co (HKSE:01839) Predictability Rank


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What is CIMC Vehicles (Group) 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.

CIMC Vehicles (Group) 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Also read:

Part II: What worked in the market from 1998-2008? Part II: Role of Valuations
Part III: Intrinsic Value, Discounted Cash Flow and Margin of Safety

CIMC Vehicles (Group) Co Predictability Rank Related Terms

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CIMC Vehicles (Group) Co (HKSE:01839) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Industrials » Farm & Heavy Construction Machinery » CIMC Vehicles (Group) Co Ltd (HKSE:01839) » Definitions » Predictability Rank
Comparable Companies
HKSE:00631 HKSE:03339 HKSE:00038 HKSE:02153 HKSE:02102 HKSE:00840 HKSE:03808 CAT DE PCAR OSTO:VOLV A TSE:6201 TSE:6301 XAMS:EXO OSTO:EPI A SHSE:600031 TSE:6326 CNHI SZSE:000425 AGCO
Traded in Other Exchanges
301039:China
Address
No. 2 Gangwan Avenue, Shekou Industrial Zone, Nanshan District, Guangdong, Shenzhen, CHN, 518067
Website
https://www.cimcvehiclesgroup.com
CIMC Vehicles (Group) Co Ltd is engaged in the manufacturing and sale of semi-trailers and truck bodies for specialty vehicles. The semi-trailers mainly include the following product lines, Container chassis trailers, Flatbed trailers & relevant derivative types, Curtain-side trailers, Van trailers, Refrigerated trailers, Tank trailers, and other special types of trailers. The truck body products include dump beds for dump trucks, mixers for mixer trucks, and a wide range of other truck bodies for specialty vehicles. Geographically, it operates in China, North America, Europe, and Other regions, out of which the majority is from China.
Executives
Citigroup Inc. 2502 Approved lending agent
Gic Private Limited 2102 Investment manager
China International Marine Containers (hong Kong) Limited 2101 Beneficial owner
Zhong Guo Guo Ji Hai Yun Ji Zhuang Xiang Ji Tuan Gu Fen You Xian Gong Si 2201 Interest of corporation controlled by you
Wang Xicheng 2201 Interest of corporation controlled by you
Shan Dong Ling Long Lun Tai Gu Fen You Xian Gong Si 2201 Interest of corporation controlled by you
Ling Long Ji Tuan You Xian Gong Si 2201 Interest of corporation controlled by you
Xiang Gang Tian Cheng Tou Zi Mao Yi You Xian Gong Si 2101 Beneficial owner

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