What is Rego Payment Architectures Predictability Rank?
1 (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.
Rego Payment Architectures 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
Rego Payment Architectures (Rego Payment Architectures) Business Description
Traded in Other Exchanges
N/A
Address
325 Sentry Parkway, Suite 200, Blue Bell, PA, USA, 19422
Rego Payment Architectures Inc is a technology company focused on delivering an online e-commerce solution for the family. Its system allows parents and their children to manage, allocate funds and track their expenditures, savings, and charitable giving online. Its system is designed to allow the child to transact online without a credit card by gaining the parent's permission ahead of time and allowing the parent to set up the rules of use. Geographically all the business activity functions through the region of the United States and it derives revenue in the form of subscription, service fees, transaction fees, and revenue sharing with banking and distribution partners.
Executives
| John Paul Dejoria Family Trust |
10 percent owner |
109 WEST 7TH STREET, SUITE 200, GEORGETOWN TX 78626 |
| Joseph Robert Toczydlowski |
officer: CFO |
39 CASTLETON DRIVE, RICHBORO PA 18954 |
| Scott Alan Mcpherson |
officer: CFO |
319 NORTH WOODMONT DRIVE, DOWNINGTOWN PA 19335 |
| Peter S Pelullo |
10 percent owner |
630 WEST GERMANTOWN PIKE, SUITE 180, PLYMOUTH MEETING PA 19462 |
| Rego Payment Architectures, Inc. |
officer: President and CEO |
325 SENTRY PARKWAY, SUITE 200, BLUE BELL PA 19422 |
| David A. Knight |
officer: President and COO |
C/O REGO PAYMENT ARCHITECTURES, INC., 18327 GRIDLEY ROAD, SUITE K, CERRITOS CA 90703 |
| John R Coyne |
director, officer: Chief Executive Officer |
466 SE 17TH TERRACE, DEERFIELD FL 33441 |
| Kathe Mae Anchel |
director, officer: President and CEO |
1621 LEWISTON DRIVE, SUNNYVALE CA 94087 |
| Dale M Jensen |
director |
9800 E DYNAMITE RD, STE 229, SCOTTSDALE AZ 85255 |
| Manning Edwin Philip Alfred |
director |
EXECUTIVE BUSINESS CONSULTANCY LTD., TEN LOVAT LANE, 10-13 LOVAT LANE, LONDON X0 EC3R 8DN |
| Gerald Hannahs |
director |
9721 COGDILL ROAD, SUITE 302, KNOXVILLE TN 37932 |
| Mcdaniel George O Iii |
director |
1800 WEST LOOP SOUTH, SUITE 500, HOUSTON TX 77027 |
| Laura Janke Jaeger |
officer: SVP Corporate Development & GC |
C/O VIRTUAL PIGGY, INC., 1221 HERMOSA AVENUE, SUITE 210, HERMOSA BEACH CA 90254 |
| William P Lyons |
director |
C/O AXS-ONE INC., 301 RT. 17 NORTH, RUTHERFORD NJ 07070 |
| William Tobia |
director |
C/O VIRTUAL PIGGY, INC., 1221 HERMOSA AVENUE, SUITE 210, HERMOSA BEACH CA 90254 |
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