NextNav (NextNav) Predictability Rank

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What is NextNav 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.

NextNav 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

NextNav Predictability Rank Related Terms

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NextNav (NextNav) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » NextNav Inc (NAS:NN) » Definitions » Predictability Rank

Comparable Companies

STEM SCWX RPAY IIIV IMXI PSFE CCSI GCT RDWR CINT MSFT ORCL ADBE PANW SNPS VMW FTNT CRWD PLTR SQ

Traded in Other Exchanges

KK0:Germany

Address

1775 Tysons Boulevard, 5th Floor, McLean, VA, USA, 22102

Website

https://www.nextnav.com

NextNav Inc provides GPS service. The company NextNav TerraPoiNT system keeps critical infrastructure resilient with reliable Position, Navigation and Timing services in the absence of GPS.

Executives

David L. Knutson	officer: SVP, Operations & Deployment	1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Sammaad Shams	officer: Corporate Controller	1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Ganesh Pattabiraman	director, officer: CEO, President & Director	1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Arun Raghupathy	officer: SVP, Engineering	1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Robert Lantz	officer: General Counsel	C/O NEXTNAV INC., 1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Bandel L Carano	director	525 UNIVERSITY AVENUE, SUITE 1300, PALO ALTO CA 94301
Gary Parsons	director	1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Alan B Howe	director	1155 KAS DRIVE SUITE 100, RICHARDSON TX 75081
Peter D Aquino	director	MOTIENT CORP, 300 KNIGHTBRIDGE PARKWAY, LINCOLNSHIRE IL 60069
Neil S Subin	director	2336 S.E. OCEAN BOULEVARD, #400, STUART FL 34996
Christian D. Gates	officer: Chief Financial Officer	1775 TYSONS BLVD., 5TH FLOOR, MCLEAN VA 22102
Wocap Global Opportunity Investment Partners, L.p.	10 percent owner	2802 TIMMONS LANE, #27440, HOUSTON TX 77227
Roderick M. Forrest	10 percent owner	VICTORIA PLACE, 31 VICTORIA STREET, HAMILTON D0 HM 10
Edward Neil Halliday	10 percent owner	VICTORIA PLACE, 31 VICTORIA STREET, HAMILTON D0 HM 10
Tivin Turchiaro	10 percent owner	VICTORIA PLACE, 31 VICTORIA STREET, HAMILTON D0 HM 10