IQVIA Holdings (IQVIA Holdings) Predictability Rank

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What is IQVIA Holdings 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.

IQVIA 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

	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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IQVIA Holdings (IQVIA Holdings) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Diagnostics & Research » IQVIA Holdings Inc (NYSE:IQV) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

IQV:Mexico QTS:Germany QTS:Germany I1QV34:Brazil

Address

2400 Ellis Road, Durham, NC, USA, 27703

Website

https://www.iqvia.com

IQVIA is the result of the 2016 merger of Quintiles, a leading global contract research organization, and IMS Health, a leading healthcare data and analytics provider. The Research & Development segment focuses primarily on providing outsourced late-stage clinical trials for pharmaceutical, device, and diagnostic firms. The technology and analytics segment provides aggregated information and technology services to clients in the healthcare industry, including pharmaceutical companies, providers, payers, and policymakers, as well as data and analytics capabilities for clinical trials, including virtual trials. The company also has a small contract sales business.

Executives

Kevin C Knightly	officer: Pres Info & Tech Solutions	1499 POST ROAD, FAIRFIELD CT 06824
Panagos Constantinos	officer: See Remarks	4280 EMPEROR BLVD, DURHAM NC 27703
Eric Sherbet	officer: See Remarks	100 IMS DRIVE, PARSIPPANY NJ 07054-4235
Keriann Cherofsky	officer: See Remarks	4280 EMPEROR BLVD, DURHAM NC 27703
Sheila A Stamps	director	C/O CIT GROUP, 1 CIT DRIVE, ATTN: GENERAL COUNSEL, LIVINGSTON NJ 07039
Morris Leslie Wims	director	4280 EMPEROR BLVD, DURHAM NC 27703
John Connaughton	director, 10 percent owner	BAIN CAPITAL PARTNERS LLC, JOHN HANCOCK TOWER, 200 CLARENDON STREET, BOSTON MA 02116
Ronald E Bruehlman	officer: See Remarks	C/O IQVIA HOLDINGS, INC., 83 WOOSTER HEIGHTS ROAD, DANBURY CT 06810
Ronald A Rittenmeyer	director	5400 LEGACY DRIVE, PLANO TX 75024
Ari Bousbib	director, officer: Chairman, CEO & Pres	UNITED TECHNOLOGIES CORP, ONE FINANCIAL PLAZA, HARTFORD CT 06101
W Richard Staub	officer: See Remarks
Tpg Group Holdings (sbs) Advisors, Inc.	10 percent owner	C/O TPG GLOBAL, LLC, 301 COMMERCE STREET, SUITE 3300, FORT WORTH TX 76102
Michael J Evanisko	director	BRAUN CONSULTING, 20 W KINZIE STREET SUITE 1600, CHICAGO IL 60610
Michael R Mcdonnell	officer: Chief Financial Officer	C/O IQVIA HOLDINGS INC., 83 WOOSTER HEIGHTS ROAD, DANBURY CT 06810
John M. Leonard	director	C/O INTELLIA THERAPEUTICS INC, 40 ERIE STREET, SUITE 130, CAMBRIDGE MA 02139