What is Plug Power 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.
Plug Power 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
Plug Power (Plug Power) Business Description
Traded in Other Exchanges
Address
968 Albany Shaker Road, Latham, NY, USA, 12110
Plug Power is building an end-to-end green hydrogen ecosystem—from production, storage and delivery to energy generation. The company plans to build and operate green hydrogen highways across North America and Europe. Plug will deliver its green hydrogen solutions directly to its customers and through joint venture partners into multiple end markets—including material handling, e-mobility, power generation, and industrial applications.
Executives
| Jose Luis Crespo |
officer: GM, MATL Handling, Key Accts |
C/O PLUG POWER INC., 968 ALBANY SHAKER ROAD, LATHAM NY 12110 |
| Mark J Bonney |
director |
2711 N. HASKELL AVENUE, SUITE 2300, DALLAS TX 74204 |
| Patrick Joggerst |
director |
C/O BROADSOFT, INC., 9737 WASHINGTONIAN BOULEVARD, SUITE 350, GAITHERSBURG MD 20878 |
| David Mindnich |
officer: EVP, Global Manufacturing |
C/O PLUG POWER INC., 968 ALBANY SHAKER ROAD, LATHAM NY 12110 |
| Keith Schmidt |
officer: GM New Mkts & Pres New Prd Dv |
C/O CHELSEA THERAPEUTICS, INC., 13950 BALLANTYNE CORPORATE PL, UNIT 325, CHARLOTTE NC 28277 |
| Jean A Bua |
director |
|
| Kavita Mahtani |
director |
C/O PLUG POWER INC., 968 ALBANY SHAKER ROAD, LATHAM NY 12110 |
| Dirk Ole Hoefelmann |
officer: GM, Electrolyzer Solutions |
C/O PLUG POWER INC., 968 ALBANY SHAKER ROAD, LATHAM NY 12110 |
| Sanjay K Shrestha |
officer: Chief Strategy Officer |
968 ALBANY SHAKER RD, LATHAM NY 12110 |
| Kyungyeol Song |
director |
C/O GROVE ENERGY CAPITAL LLC, 55 EAST 59TH ST. 11TH FL., NEW YORK NY 10022 |
| Kim Harriman |
director |
C/O PLUG POWER INC., 968 ALBANY SHAKER ROAD, LATHAM NY 12110 |
| Andrew Marsh |
director, officer: President & CEO |
968 ALBANY SHAKER ROAD, LATHAM NY 12110 |
| George C Mcnamee |
director, officer: Chairman of the Board |
FIRST ALBANY COMPANIES INC., 677 BROADWAY, ALBANY NY 12207-2990 |
| Jonathan M Silver |
director |
3027 N STREET NW, WASHINGTON DC 20007 |
| Conway Gerard L Jr |
officer: General Counsel |
968 ALBANY-SHAKER ROAD, LATHAM NY 12110 |
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
PLUG has been successfully added to your