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Sportsman's Warehouse Holdings (Sportsman's Warehouse Holdings) Predictability Rank


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What is Sportsman's Warehouse Holdings Predictability Rank?

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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.

Sportsman's Warehouse Holdings 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Sportsman's Warehouse Holdings Predictability Rank Related Terms

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Sportsman's Warehouse Holdings (Sportsman's Warehouse Holdings) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Sportsman's Warehouse Holdings Inc (NAS:SPWH) » Definitions » Predictability Rank
Comparable Companies
BARK BGFV EVGO GRWG TCS CONN ONEW BNED ZKGCF PTZH ORLY TSX:ATD AZO SHSE:601888 TSCO ULTA GPC BBY ADX:ADNOCDIST CASY
Traded in Other Exchanges
06S:Germany
Address
1475 West 9000 South, Suite A, West Jordan, UT, USA, 84088
Website
https://www.sportsmans.com
Sportsman's Warehouse Holdings Inc together with its subsidiaries operates as an outdoor sporting goods retailer. It provides a one-stop shopping experience that equips customers with the right quality, brand name hunting, shooting, fishing, and camping gear to maximize enjoyment of the outdoors. The company offers products in the categories of Camping, Apparel, Fishing, Footwear, Hunting and shooting, and Optics, Electronics, Accessories, and Other products. It provides products such as Backpacks, Jackets, Camp essentials, Hiking boots, GPS devices, ATV accessories and Fishing rods, among others.
Executives
Paul Stone director, officer: PRESIDENT AND CEO HERTZ GLOBAL HOLDINGS, INC., 8501 WILLIAMS ROAD, ESTERO FL 33928
Steven W. Sansom director 1475 WEST 9000 SOUTH, SUITE A, WEST JORDAN UT 84088
Richard D Mcbee director PO BOX 500 (M/S 55-985), 14200 SW KARL BRAUN DRIVE, BEAVERTON OR 97077-0001
Gregory P Hickey director C/O SPORTSMAN'S WAREHOUSE HOLDINGS, INC., 7035 SOUTH HIGH TECH DRIVE, MIDVALE UT 84047
Cannell Capital Llc 10 percent owner 245 MERIWETHER CIRCLE, ALTA WY 83414
Erica Fortune director C/O SPORTMAN'S WAREHOUSE HOLDINGS, INC., 7035 SOUTH HIGH TECH DRIVE, MIDVALE UT 84047
Jon Barker officer: President and COO C/O SPORTSMAN'S WAREHOUSE HOLDINGS, INC., 7035 SOUTH HIGH TECH DRIVE, MIDVALE UT 84047
Nancy A Walsh director LL FLOORING HOLDINGS, INC., 4901 BAKERS MILL LANE, RICHMOND VA 23230
Joseph P Schneider director C/O LACROSSE FOOTWEAR INC, 18550 NE RIVERSIDE PARKWAY, PORTLAND OR 972304975
Jeffrey Justin White officer: VP Finance, CAO, Interim CFO SPORTSMAN'S WAREHOUSE, 1475 WEST 9000 SOUTH SUITE A, WEST JORDAN UT 84088
Christopher Eastland director C/O SEIDLER KUTSENDA MANAGEMENT COMPANY, 4640 ADMIRALTY WAY, SUITE 1200, MARINA DEL REY CA 90292
Robert K. Julian officer: Chief Financial Officer C/O SPORTSMAN'S WAREHOUSE, 7035 SOUTH HIGH TECH DRIVE, MIDVALE UT 84047
Martha Helena Bejar director C/O POLYCOM, INC., 6001 AMERICA CENTER DRIVE, SAN JOSE CA 95002
Kent Vernon Graham director 11727 FOLKSTONE LANE, LOS ANGELES CA 90077
Philip Williamson director C/O SPORTSMAN'S WAREHOUSE HOLDINGS, INC., 7035 SOUTH HIGH TECH DRIVE, MIDVALE UT 84047