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Trio-Tech International (Trio-Tech International) Predictability Rank


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What is Trio-Tech International 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.

Trio-Tech International 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

Trio-Tech International Predictability Rank Related Terms

Thank you for viewing the detailed overview of Trio-Tech International's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Trio-Tech International (Trio-Tech International) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Trio-Tech International (AMEX:TRT) » Definitions » Predictability Rank
Comparable Companies
SCIA SMTK SODI RBCN GSTX ASYS ATOM INTT XAMS:ASML AMAT LRCX TSE:8035 KLAC TSE:6146 XAMS:ASM TSE:6857 TSE:6920 TER SZSE:002371 ENTG
Traded in Other Exchanges
N/A
Address
Unit 03-09, Block 1008, Toa Payoh North, Singapore, SGP, 318996
Website
https://triotech.com
Trio-Tech International is a provider of third-party semiconductor testing and burn-in services through its laboratories in Southeast Asia. The company operates in four segments namely Manufacturing, Testing services, Distribution, and Real Estate. Its Manufacturing segment manufactures both front-end and back-end semiconductor test equipment and related peripherals. The Testing segment renders services to the manufacturer and purchaser of semiconductors and other entities. Its Distribution segment is involved in the distribution of its products. The company's Real Estate segment consists of investment in real estate. Its geographical area of operations includes the United States, Singapore, Malaysia, Thailand, and China.
Executives
Jason T Adelman director 900 PARK AVENUE, APARTMENT 15A, NEW YORK NY 10021
Anitha Srinivasan officer: CFO 103 HILLVIEW RISE, #09-18, SINGAPORE U0 667982
Ting Victor Hock Ming director 770 BEDOK RESERVOIR ROAD, #01-03, SINGAPORE U0 479250
S W Yong director, 10 percent owner, officer: Chief Executive Officer 7 PANDAN VALLEY, 16-502 POINCIANA TOWER, SINGAPORE U0 597631
Richard M Horowitz director 9301 WILSHIRE BOULEVARD #206, BEVERLY HILLS CA 90210
Kuan Soon Siew officer: Vice President 126 BUKIT MERAH VIEW, #18-374 U0 151126
Hwee Poh Lim officer: Vice President - Testing 39 WARINGIN WALK, SINGAPORE U0 416292
A Charles Wilson director 623 NORTH PALM DRIVE, BEVERLY HILLS CA 90210
Daniel Zeff 10 percent owner 400 S. MCCADDEN PL., LOS ANGELES CA 90020
Spectrum Galaxy Fund Ltd. 10 percent owner 50 CALIFORNIA STREET, SUITE 1500, SAN FRANCISCO CA 94111
Zeff Capital Partners I, L.p. 10 percent owner C/O ZEFF HOLDING COMPANY, LLC, 50 CALIFORNIA STREET, SAN FRANCISCO CA 94111
Zeff Holding Company, Llc 10 percent owner 400 S. MCCADDEN PL., LOS ANGELES CA 90020

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