What is Liberty TripAdvisor Holdings Predictability Rank?
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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.
Liberty TripAdvisor 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
| 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
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
Liberty TripAdvisor Holdings (Liberty TripAdvisor Holdings) Business Description
Traded in Other Exchanges
Address
12300 Liberty Boulevard, Englewood, CO, USA, 80112
Liberty TripAdvisor Holdings Inc provides online travel site services and online retail through its subsidiary TripAdvisor. Tripadvisor operates across three reportable segments: Tripadvisor Core, Viator, and TheFork.The Tripadvisor brand offers travelers and experience seekers an online platform for travelers to discover, generate, and share authentic user-generated content in the form of ratings and reviews for destinations, points of interest, experiences, accommodations, restaurants, and cruises. Viator's online marketplace is comprehensive, connecting travelers to bookable tours, activities and attractions. TheFork provides an online marketplace that enables diners to discover and book online reservations at more than 55,000 restaurants in 12 countries.
Executives
| Brian J Wendling |
officer: SVP/CFO |
12300 LIBERTY BOULEVARD, ENGLEWOOD CO 80112 |
| Dustin Henderson |
other: shareholder |
11125 N PARK BLVD, STE 106, SEMINOLE FL 33772 |
| Albert E Rosenthaler |
officer: Senior Vice President |
12300 LIBERTY BLVD, ENGLEWOOD CO 80112 |
| Renee L Wilm |
officer: Chief Legal Officer |
12300 LIBERTY BOULEVARD, ENGLEWOOD CO 80112 |
| Christy Haubegger |
director |
330 WEST 34TH STREET, NEW YORK NY 10001 |
| J David Wargo |
director |
C/O WARGO & CO, 712 FIFTH AVENUE 41ST FLOOR, NEW YORK NY 10019 |
| Michael Gregory Ohara |
director |
C/O CERTARES MANAGEMENT LLC, 350 MADISON AVENUE, 8TH FLOOR, NEW YORK NY 10017 |
| Pemrose Corp |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Certares Ltrip Llc |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Certares Holdings (blockable) Llc |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Certares Holdings Llc |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Certares Holdings (optional) Llc |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Certares Management Llc |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Clementine Investments Llc |
director |
350 MADISON AVENUE 8TH FLOOR, NEW YORK NY 10017 |
| Farmer Colin Michael |
director |
C/O CERTARES MANAGEMENT LLC, 350 MADISON AVENUE, 8TH FLOOR, NEW YORK NY 10017 |
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