Corteva (Corteva) Predictability Rank

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What is Corteva 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.

Corteva 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

Corteva Predictability Rank Related Terms

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Corteva (Corteva) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Agriculture » Corteva Inc (NYSE:CTVA) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

CTVA:Mexico 2X0:Germany 2X0:Germany 2X0:Germany C1TV34:Brazil CTVA:Austria

Address

974 Centre Road, Wilmington, DE, USA, 19805

Website

https://www.corteva.com

Corteva is an agriculture pure play that was formed in 2019 when it was spun off from DowDuPont. The company is a leader in the development of new seed and crop chemicals products. Seeds and crop protection chemicals each make up around half of profits. Although Corteva operates globally, around half of revenue comes from North America.

Executives

Samuel R Eathington	officer: SVP, Chief Technology Officer	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
Robert D. King	officer: EVP, Crop Protection Business	C/O CORTEVA, INC., 9330 ZIONSVILLE ROAD, INDIANAPOLIS IN 46268
Timothy P Glenn	officer: See Remarks	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
Fuerer Cornel B	director, officer: See Remarks	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
David J Anderson	officer: EVP, Chief Financial Officer	C/O HONEYWELL INTERNATIONAL INC, 101 COLUMBIA ROAD, MORRISTOWN NJ 09762
Charles V. Magro	director, officer: CEO	C/O CORTEVA, INC., 974 CENTRE ROAD, CRP 735, WILMINGTON DE 19805
Audrey Grimm	officer: See Remarks	C/O CORTEVA, INC., 9330 ZIONSVILLE ROAD, INDIANAPOLIS IN 46268
Klaus A Engel	director	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
Meghan Cassidy	officer: See Remarks	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
Brian Titus	officer: See Remarks	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
Rajan Gajaria	officer: See Remarks	C/O CORTEVA, INC., 974 CENTRE ROAD, BLDG. 735, WILMINGTON DE 19805
Janet Plaut Giesselman	director	25435 HARVARD RD., BEACHWOOD OH 44122
Kerry J Preete	director	800 NORTH LINDBERGH BLVD., ST. LOUIS MO 63167
David C Everitt	director	DEERE & COMPANY, ONE JOHN DEERE PLACE, MOLINE IL 61265
Karen H. Grimes	director	TOLL BROTHERS, INC., 1140 VIRGINIA DRIVE, FORT WASHINGTON PA 19034