Oportun Financial (Oportun Financial) Predictability Rank

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What is Oportun Financial 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.

Oportun Financial 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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Oportun Financial (Oportun Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Credit Services » Oportun Financial Corp (NAS:OPRT) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

4L0:Germany

Address

2 Circle Star Way, San Carlos, CA, USA, 94070

Website

https://www.oportun.com

Oportun Financial Corp is engaged in providing financial services to people who either do not have a credit score or who may have a limited credit history. The company offers Personal Loans and Auto Loans to its customers. Its product offerings include small-dollar, unsecured installment loans and other products and services.

Executives

Jules A. Maltz	10 percent owner	3000 SAND HILL ROAD, BUILDING 2, SUITE 250, MENLO PARK CA 94025
Institutional Venture Management Xiv, Llc	10 percent owner	3000 SAND HILL ROAD, BUILDING 2, SUITE 250, MENLO PARK CA 94025
Kathleen I. Layton	officer: Chief Legal Officer	2 CIRCLE STAR WAY, SAN CARLOS CA 94070
Jonathan Aaron Coblentz	officer: CFO & Chief Admin Officer	23 WEST 73RD STREET, APT 914, NEW YORK NY 10023
Raul Vazquez	director, officer: Chief Executive Officer	500 STAPLES DR., FRAMINGHAM MA 01702
Aida Alvarez	director	5995 PLAZA DRIVE MAIL ST CY20-103, CYPRESS CA 90630
Casey Mueller	officer: Global Controller and PAO	2 CIRCLE STAR WAY, SAN CARLOS CA 94070
Patrick Kirscht	officer: Chief Credit Officer	2 CIRCLE STAR WAY, SAN CARLOS CA 94070
Ginny Lee	director	2 CIRCLE STAR WAY, SAN CARLOS CA 94070
Sandra Adele Smith	director	2 CIRCLE STAR WAY, SAN CARLOS CA 94070
Frederic Welts	director	GOLDEN STATE WARRIORS, 1011 BROADWAY, OAKLAND CA 94607
Roy Banks	director	6129 WEST 9600 NORTH, HIGHLAND UT 84003
Greylock Xii Gp Llc	10 percent owner	2550 SAND HILL ROAD, SUITE 200, MENLO PARK CA 94025
David Anthony Needham	officer: Chief Technology Officer	2 CIRCLE STAR WAY, SAN CARLOS CA 94070
Joan Aristei	officer: GC & Chief Compliance Officer	2 CIRCLE STAR WAY, SAN CARLOS CA 94070