PURE Bioscience (PURE Bioscience) Predictability Rank

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What is PURE Bioscience Predictability Rank?

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.

PURE Bioscience 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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PURE Bioscience (PURE Bioscience) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » PURE Bioscience Inc (OTCPK:PURE) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

771 Jamacha Road, No. 512, El Cajon, CA, USA, 92019

Website

https://www.purebio.com

PURE Bioscience Inc is engaged in developing and commercializing proprietary antimicrobial products. The company's technology platform is based on patented stabilized ionic silver, and its initial products contain silver dihydrogen citrate, or SDC. It offers PURE Hard Surface as a food contact surface sanitizer and disinfectant to restaurant chains, food processors and food transportation companies and PURE Control as a direct food contact processing aid. It also manufactures and sells SDC-based products for end use, products preserved with SDC and SDC as a raw material ingredient for manufacturing use.

Executives

Robert F Bartlett	director	9669 HERMOSA AVENUE, RANCHO CUCAMONGA CA 91730
Bernard Blotner	director	9669 HERMOSA AVENUE, RANCHO CUCAMONGA CA 91730
Tom Y Lee	director	1807 SAN GABRIEL BLVD., SAN GABRIEL CA 91776
David Rendall	director	9669 HERMOSA AVENUE, RANCHO CUCAMONGA CA 91730
Kristin Taylor	director	13500 EVENING CREEK DRIVE N, SUITE 550, SAN DIEGO CA 92128
Dale Okuno	director	35 N. ARROYO PARKWAY, SUITE 1, PASADENA CA 91103
Ivan Chen	director	1725 GILLESPIE WAY, EL CAJON CA 92020
Thomas Richard Myers	officer: Chief Operating Officer	1725 GILLESPIE WAY, EL CAJON CA 92130
Henry R. Lambert	director, officer: Chief Executive Officer	1725 GILLESPIE WAY, EL CAJON CA 92020
Elisabeth Hagen	director	1725 GILLESPIE WAY, EL CAJON CA 92020
Janet Risi Field	director	9200 SOUTH DADELAND BOULEVARD, SUITE 800, MIAMI FL 33156
Franchise Brands, Llc	10 percent owner	325 BIC DRIVE, MILFORD CT 06461
Mark Stuart Elliott	officer: Vice President, Finance	1725 GILLESPIE WAY, EL CAJON CA 92020
William Otis	director	1725 GILLESPIE WAY, EL CAJON CA 92020
David M Theno	director	1725 GILLESPIE WAY, EL CAJON CA 92020