What is Park Hotels & Resorts Predictability Rank?
1 (5)
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.
Park Hotels & Resorts 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
Park Hotels & Resorts (Park Hotels & Resorts) Business Description
Traded in Other Exchanges
Address
1775 Tysons Boulevard, 7th Floor, Tysons, VA, USA, 22102
Park Hotels & Resorts owns upper-upscale and luxury hotels with 26,373 rooms across 41 hotels in the United States. Park also has interests through joint ventures in another 2,656 rooms in four U.S. hotels. Park was spun out of narrow-moat Hilton Worldwide Holdings at the start of 2017, so most of the company's hotels are still under Hilton brands. The company has sold all its international hotels and many of its lower-quality U.S. hotels to focus on high-quality assets in domestic gateway markets.
Executives
| Geoffrey Garrett |
director |
C/O PARK HOTELS & RESORTS, 1775 TYSONS BOULEVARD, 7TH FLOOR, TYSONS VA 22102 |
| Thomas D Eckert |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Nancy M. Vu |
officer: SVP,Gen. Counsel & Secretary |
1775 TYSONS BLVD., 7TH FLOOR, TYSONS VA 22102 |
| Thomas A Natelli |
director |
1997 ANNAPOLIS EXCHANGE PARKWAY, SUITE 410, ANNAPOLIS MD 21401 |
| Jill C Olander |
officer: See Remarks |
C/O PARK HOTELS & RESORTS INC., 1775 TYSONS BLVD., 7TH FLOOR, TYSONS VA 22102 |
| Baltimore Thomas J Jr |
director, officer: See Remarks |
PARK HOTELS & RESORTS INC., 1775 TYSONS BLVD, 7TH FLOOR, TYSONS VA 22102 |
| Darren W Robb |
officer: See Remarks |
C/O PARK HOTELS & RESORTS INC., 1775 TYSONS BLVD., 7TH FLOOR, TYSONS VA 22102 |
| Carl A. Mayfield |
officer: EVP, Design and Construction |
C/O PARK HOTELS & RESORTS INC., 1775 TYSONS BLVD, 7TH FLOOR, TYSONS VA 22102 |
| Matthew Abram Sparks |
officer: See Remarks |
C/O HILTON GRAND VACATIONS, 5323 MILLENIA LAKES BLVD., SUITE 400, ORLANDO FL 32839 |
| Hna Tourism Group Co., Ltd. |
10 percent owner |
HNA BUILDING, NO. 7 GUOXING ROAD, HAIKOU F4 570203 |
| Stephen I Sadove |
director |
|
| Mu Xianyu |
director |
C/O PARK HOTELS & RESORTS INC., 1600 TYSONS BOULEVARD, STE. 1000, MCLEAN VA 22102 |
| Blackstone Real Estate Associates Vi L.p. |
10 percent owner |
C/O THE BLACKSTONE GROUP, 345 PARK AVE., NEW YORK NY 10154 |
| Blackstone Real Estate Partners Vi.te.2 Prime L.p. |
10 percent owner |
C/O THE BLACKSTONE GROUP L.P., 345 PARK AVE., NEW YORK NY 10154 |
| Hlt Holdco Iii Prime Llc |
10 percent owner |
C/O THE BLACKSTONE GROUP L.P., 345 PARK AVE., NEW YORK NY 10154 |
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