Willdan Group (Willdan Group) Predictability Rank

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What is Willdan Group Predictability Rank?

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.

Willdan Group 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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Willdan Group (Willdan Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Willdan Group Inc (NAS:WLDN) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

J2A:Germany J2A:Germany

Address

2401 East Katella Avenue, Suite 300, Anaheim, CA, USA, 92806

Website

https://www.willdan.com

Willdan Group Inc is a provider of professional technical and consulting services to utilities, private industry, and public agencies at all levels of government. It operates in the business segments of Energy and Engineering and Consulting. It generates the majority of its revenue from the Energy segment, which includes services such as audit and surveys, program design, master planning, benchmarking analyses, design engineering, construction management, performance contracting, installation, advances in software and data analytics, and other services. All of its revenue is derived from the domestic market.

Executives

Creighton K Early	officer: Vice President and CFO	C/O WILLDAN GROUP INC., 2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Michael A Bieber	officer: SVP, Corporate Development	3475 EAST FOOTHILL BOULEVARD, PASADENA CA 91107
Thomas Donald Brisbin	director, officer: President and CEO	2401 E. KATELLA AVENUE, #300, ANAHEIM CA 92806
Micah Chen	officer: General Counsel	2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Forager Fund, L.p.	10 percent owner	C/O FORAGER CAPITAL MANAGEMENT, LLC, 2024 3RD AVE N SUITE 201, BIRMINGHAM AL 35203
Robert Symmes Macarthur	10 percent owner	C/O FORAGER CAPITAL MANAGEMENT, LLC, 2024 3RD AVE. N, SUITE 201, BIRMINGHAM AL 35203
Edward Urban Kissel	10 percent owner	C/O FORAGER CAPITAL MANAGEMENT, LLC, 2024 3RD AVE. N, SUITE 201, BIRMINGHAM AL 35203
Mohammad Shahidehpour	director	2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Keith W Renken	director	PACIFIC GULF PROPERTIES INC, 4220 VON KARMAN SECOND FLOOR, NEWPORT BEACH CA 92660-2002
Dennis V Mcginn	director	46415 MILLSTONE LANDING ROAD, LEXINGTON PARK MD 20653
Paul Milton Whitelaw	officer: SVP, Business Development	2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Wanda Kay Reder	director	C/O WILLDAN GROUP, 2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Adam C Procell	officer: EVP, Chief Strategy Officer	C/O WILLDAN, 12401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Cynthia Downes	director	C/O WILLDAN GROUP, INC., 2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806
Stacy B. Mclaughlin	officer: Chief Financial Officer	2401 EAST KATELLA AVENUE, SUITE 300, ANAHEIM CA 92806