Recursion Pharmaceuticals (Recursion Pharmaceuticals) Predictability Rank

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What is Recursion Pharmaceuticals 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.

Recursion Pharmaceuticals 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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Recursion Pharmaceuticals (Recursion Pharmaceuticals) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Biotechnology » Recursion Pharmaceuticals Inc (NAS:RXRX) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

41 S Rio Grande Street, Salt Lake City,, UT, USA, 84101

Website

https://www.recursion.com

Recursion Pharmaceuticals Inc is a clinical-stage biotechnology company. It is decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering, with the goal of radically improving the lives of patients and industrializing drug discovery.

Executives

Michael Secora	officer: Chief Financial Officer	C/O RECURSION PHARMACEUTICALS, 41 S. RIO GRANDE STREET, SALT LAKE CITY UT 84101
Shafique Virani	officer: Chief Corp. Dev. Officer	C/O RECURSION PHARMACEUTICALS, 41 S. RIO GRANDE STREET, SALT LAKE CITY UT 84101
Dean Y Li	director	2000 GALLOPING HILL ROAD, KENILWORTH NJ 07033
Blake Borgeson	director	C/O RECURSION PHARMACEUTICALS, 41 S. RIO GRANDE STREET, SALT LAKE CITY UT 84101
Christopher Gibson	director, 10 percent owner, officer: Chief Executive Officer	C/O RECURSION PHARMACEUTICALS, 41 S. RIO GRANDE STREET, SALT LAKE CITY UT 84101
Tina Marriott Larson	officer: President and COO	C/O RECURSION PHARMACEUTICALS, 41 S. RIO GRANDE STREET, SALT LAKE CITY UT 84101
Zavain Dar	director	C/O LUX CAPITAL MANAGEMENT, LLC, 1600 EL CAMINO REAL - SUITE 290, MENLO PARK CA 94025
Terry-ann Burrell	director	C/O BEAM THERAPEUTICS INC., 26 LANDSDOWNE STREET, CAMBRIDGE MA 02139
David J Mauro	officer: Chief Medical Officer	36 TERRELL DRIVE, WASHINGTON CROSS PA 18977
Mubadala Investment Co Pjsc	10 percent owner	P.O. BOX 45005, ABU DHABI C0 00000
Peter Hebert	other: Former 10% Owner	C/O LUX VENTURES, 295 MADISON AVE, 24TH FLOOR, NEW YORK NY 10017
Lux Ventures Iv, L.p.	other: Former 10% Owner	295 MADISON AVENUE, 24TH FLOOR, NEW YORK NY 10017
Lux Venture Partners Iv, Llc	other: Former 10% Owner	920 BROADWAY, 11TH FLOOR, NEW YORK NY 10010
Lux Co-invest Partners, Llc	other: Former 10% Owner	C/O LUX CAPITAL, 920 BROADWAY, 11TH FLOOR, NEW YORK NY 10010
Lux Co-invest Opportunities, L.p.	other: Former 10% Owner	C/O LUX CAPITAL MANAGEMENT, 920 BROADWAY, 11TH FLOOR, NEW YORK NY 10010