Iridium Communications (Iridium Communications) Predictability Rank

View and export this data going back to 2008. Start your Free Trial

What is Iridium Communications 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.

Iridium Communications 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

Iridium Communications Predictability Rank Related Terms

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

Iridium Communications (Iridium Communications) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Iridium Communications Inc (NAS:IRDM) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

6IC:Germany 6IC:Germany

Address

1750 Tysons Boulevard, Suite 1400, McLean, VA, USA, 22102

Website

https://www.iridium.com

Iridium Communications Inc offers voice and data communications services and products to businesses, U.S. and international government agencies, and other customers on a global basis. The company is a provider of mobile voice and data communications services through a constellation of low earth-orbiting satellites. Reaching across land, sea, and air, including the polar regions, Iridium's solutions are ideally suited for industries such as maritime, aviation, government/military, emergency/humanitarian services, mining, forestry, oil and gas, heavy equipment, transportation, and utilities. Iridium also provides service to subscribers from the U.S. Department of Defense, as well as other civil and government agencies around the world.

Executives

Matthew J Desch	director, officer: Chief Executive Officer	C/O SAIC, 10260 CAMPUS POINT DR M/S F3, SAN DIEGO CA 92121
Jacqueline E Yeaney	director	2002 SUMMIT BOULEVARD, SUITE 100, ATLANTA GA 30319
Bryan J. Hartin	officer: EVP-Sales and Marketing	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD, SUITE 1400, MCLEAN VA 22102
Robert H Niehaus	director, officer: Senior Vice President	4747 GAILLARDIA PARKWAY, OKLAHOMA CITY OK 73142
Suzanne E. Mcbride	officer: Chief Operations Officer	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD, SUITE 1400, MCLEAN VA 22102
Barry West	director	NEXTEL, 2001 EDMUND HALLEY DR, RESTON VA 20191
Scott Scheimreif	officer: EVP-Government Programs	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD, SUITE 1400, MCLEAN VA 22102
Thomas C Canfield	director	C/O SPIRIT AIRLINES, INC., 2800 EXECUTIVE WAY, MIRAMAR FL 33025
Kathleen A. Morgan	officer: Chief Legal Officer	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD SUITE 1400, MCLEAN VA 22102
Thomas Fitzpatrick	officer: Chief Financial Officer	C/O CENTENNIAL COMMUNICATIONS CORP, 3349 RTE 138, WALL NJ 07719
Henrik O. Schliemann	director	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD, SUITE 1400, MCLEAN VA 22102
Timothy Kapalka	officer: VP Iridium Satellite LLC	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD, MCLEAN VA 22102
Parker William Rush	director	5525 LBJ FREEWAY, DALLAS TX 75240
A B Krongard	director	C/O UNDER ARMOUR, INC., 1020 HULL STREET, BALTIMORE MD 21230
Kay Sears	director	C/O IRIDIUM COMMUNICATIONS INC., 1750 TYSONS BOULEVARD, SUITE 1400, MCLEAN VA 22102