What is The Beauty Health Co 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.
The Beauty Health Co 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
The Beauty Health Co (The Beauty Health Co) Business Description
Traded in Other Exchanges
Address
2165 Spring Street, Long Beach, CA, USA, 90806
The Beauty Health Co is a category-creating beauty health company focused on bringing innovative products to market. The company's flagship brand HydraFacial is a non-invasive, and approachable beauty health platform and ecosystem with a powerful community of estheticians, consumers and partners, bridging medical and consumer retail to democratize and personalize skin care solutions for the masses. Geographically, it derives a majority of revenue from the Americas.
Executives
| Michael D Capellas |
director |
C/O MCI, 22001 LOUDOUN COUNTY PARKWAY, AXBURN VA 20147 |
| Brian Christopher Miller |
10 percent owner |
1819 WEST AVENUE, BAY 2, MIAMI BEACH FL 33139 |
| Andrew Roy Stanleick |
director, officer: Chief Executive Officer |
C/O THE BEAUTY HEALTH COMPANY, 2165 SPRING STREET, LONG BEACH CA 90806 |
| Michael P. Monahan |
officer: Chief Financial Officer |
9 PENARTH ROAD, BALA CYNWYD PA 19004 |
| Brent L Saunders |
director, officer: Executive Chairman |
2000 GALLOPING HILL ROAD, C/O SCHERING PLOUGH CORP, KENILWORTH NJ 07033 |
| Julius Few |
director |
1819 WEST BAY 2, MIAMI FL 33139 |
| Doug K. Schillinger |
director |
1819 WEST AVENUE, BAY 2, MIAMI BEACH FL 33139 |
| Desiree Gruber |
director |
C/O DPCM CAPITAL, INC., 382 NE 191 STREET, #24148, MIAMI FL 33179 |
| Marla Malcolm Beck |
director |
C/O THE CHILDREN'S PLACE, INC., 500 PLAZA DRIVE, SECAUCUS NJ 07094 |
| Bradley Hauser |
officer: Chief Operating Officer |
C/O ZELTIQ AESTHETICS, INC., 4698 WILLOW ROAD, SUITE 100, PLEASANTON CA 94588 |
| Stephan Becker |
officer: President, EMEA |
2165 SPRING STREET, LONG BEACH CA 90806 |
| Indra Pamamull |
officer: President, APAC |
C/O THE BEAUTY HEALTH COMPANY, 2165 SPRING STREET, LONG BEACH CA 90806 |
| Liyuan Woo |
officer: Chief Financial Officer |
400 VALLEY DRIVE, BRISBANE CA 94005 |
| Watson Daniel Copell |
officer: See Remarks |
1819 WEST AVENUE, BAY 2, MIAMI BEACH FL 33139 |
| Lcp Edge Holdco Llc |
10 percent owner |
150 NORTH RIVERSIDE PLAZA, SUITE 5100, CHICAGO IL 60606 |
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