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China Aircraft Leasing Group Holdings (HKSE:01848) Predictability Rank


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What is China Aircraft Leasing Group Holdings Predictability Rank?

2 (5)

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.

China Aircraft Leasing Group Holdings 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

China Aircraft Leasing Group Holdings Predictability Rank Related Terms

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China Aircraft Leasing Group Holdings (HKSE:01848) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » China Aircraft Leasing Group Holdings Ltd (HKSE:01848) » Definitions » Predictability Rank
Comparable Companies
HKSE:00254 HKSE:00936 HKSE:01496 HKSE:08425 HKSE:01581 HKSE:08612 HKSE:01341 HKSE:03877 URI LSE:AHT AER BSP:RENT3 UHAL WSC CAR XPAR:ALD TSX:EFN TSE:8439 HKSE:02588 R
Traded in Other Exchanges
CFRLF:USA
Address
16 Harcourt Road, 32nd Floor, Far East Finance Centre, Admiralty, Hong Kong, HKG
Website
https://www.calc.com.hk
China Aircraft Leasing Group Holdings Ltd is one of the largest independent aircraft lessors in China. The company delivers multiple types of leases and customizes deals to customer preferences. It has diversified financing channels in onshore and offshore banks, insurance companies, capital and debt markets, and export credit agencies. In addition to providing aircraft leases, the company offers customers lifecycle solutions, including fleet planning, aircraft resales, and aircraft disassembles. China Aircraft Leasing has multiple offices located in Asia and Europe. It works with Chinese and Asian airlines, regional operators, and other international air transportation companies.
Executives
Poon Ho Man 2101 Beneficial owner
China Everbright Holdings Company Limited 2201 Interest of corporation controlled by you
Capella Capital Limited 2201 Interest of corporation controlled by you
Friedmann Pacific Asset Management Limited 2101 Beneficial owner
Ng Christina 2201 Interest of corporation controlled by you
Central Huijin Investment Ltd.
China Everbright Limited
Zhong Guo Guang Da Ji Tuan Gu Fen Gong Si

China Aircraft Leasing Group Holdings (HKSE:01848) Headlines

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