What is Anavex Life Sciences 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.
Anavex Life Sciences 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
Anavex Life Sciences (Anavex Life Sciences) Business Description
Traded in Other Exchanges
Address
630 5th Avenue, 20th Floor, New York, NY, USA, 10111
Anavex Life Sciences Corp is a clinical-stage biopharmaceutical company engaged in the development of differentiated therapeutics by applying precision medicine to central nervous system diseases with high unmet need. It analyzes genomic data from clinical studies to identify biomarkers, which are used to select patients that will receive the therapeutic benefit for the treatment of neurodegenerative and neurodevelopmental diseases. Its necessary compound ANAVEX 2-73 is being developed to treat Alzheimer's disease, Parkinson's disease, and potentially other central nervous system diseases, including rare diseases, such as Rett syndrome, a rare severe neurological monogenic disorder. The company's operating segment is into developing novel therapies for the management of CNS diseases.
Executives
| Christopher U Missling |
director, officer: President, CEO, CFO, Treasurer, other: Secretary |
61 MOULTON ST, CAMBRIDGE MA 02138 |
| Athanasios Skarpelos |
10 percent owner |
14,RUE KLEBERG, GENEVA V8 CH-1201 |
| Jiong Ma |
director |
445 PARK AVENUE, 9TH FLOOR, NEW YORK NY 10022 |
| Elliot Favus |
director |
51 W 52ND STREET, 7TH FLOOR, NEW YORK NY 10091 |
| Donhauser Peter D.o. |
director |
REGINA-KIRCHMAIER STRASSE 4, KAUFBEUREN 2M 87600 |
| Sandra Boenisch |
officer: PFO & Treasurer |
51 WEST 52ND STREET, 7TH FLOOR, NEW YORK NY 10019 |
| Claus Vander Velden |
director |
PO BOX MUENSTEREIFELER ST., COLOGNE 2M 50937 |
| Steffen Thomas |
director |
FALLMERAYER STR. 19, MUNICH 2M 80796 |
| Bernd Metzner |
director |
51 W 52ND STREET, 7TH FLOOR, NEW YORK NY 10019 |
| George F Tidmarsh |
director, officer: Executive Director |
|
| John Robert Chisholm |
director |
16308 36A AVENUE, SURREY A1 V3S 0X5 |
| William Sean Lowry |
director |
1172 BAY STREET, SUITE 300, ONTARIO Z4 M5S1L9 |
| David L. Tousley |
director |
14610 PAWNEE LANE, LEAWOOD KS 66224 |
| Harvey Lalach |
director, officer: President CEO CFO |
4837 CANYON RIDGE CRESENT, KELOWNA A1 V1W 4A1 |
| Alison E. Ayers |
director |
27 O'CONNOR CIRCLE, WEST ORANGE NJ 07052 |
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