SBA Communications (SBA Communications) Predictability Rank

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What is SBA 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.

SBA 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

SBA Communications Predictability Rank Related Terms

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SBA Communications (SBA Communications) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » SBA Communications Corp (NAS:SBAC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

4SB:Germany 4SB:Germany

Address

8051 Congress Avenue, Boca Raton, FL, USA, 33487

Website

https://www.sbasite.com

SBA Communications owns and operates almost 40,000 cell towers throughout North America, South America, and Africa. It leases space on its towers to wireless service providers, who install equipment on the towers to support their wireless networks. The company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company owns more than 17,000 towers in the U.S., which accounted for about three fourths of the company's total revenue in 2022. Internationally, SBA's greatest presence is in Brazil, where it operates roughly 10,000 towers. SBA operates as a real estate investment trust, or REIT.

Executives

Jason V Silberstein	officer: Vice President-Property Mgt
Brian D Lazarus	officer: VP & Chief Accounting Officer	5900 BROKEN SOUND PARKWAY, NW, BOCA RATON FL 33487
Steven E Bernstein	director, 10 percent owner, officer: Chairman	C/O SBA COMMUNICATIONS CORP, ONE TOWN CENTER ROAD - THIRD FLOOR, BOCO RATON FL 83486
Mark R Ciarfella	officer: SVP ?? Operations	C/O SBA COMMUNICATIONS CORPORATION, 5900 BROKEN SOUND PARKWAY NW, BOCA RATON FL 33487
Joshua Koenig	officer: Executive VP/General Counsel	C/O SBA COMMUNICATIONS CORPORATION, 8051 CONGRESS AVENUE, BOCA RATON FL 33487
Jeffrey Stoops	director, officer: Chief Executive Officer & Pres	SBA COMMUNICATIONS CORP, ONE TOWN CENTER ROAD THIRD FLOOR, BOCA RATON FL 33486
Krouse George R Jr	director	C/O SBA COMMUNICATIONS CORPORATION, 5900 BROKEN SOUND PARKWAY, NW, BOCA RATON FL 33487
Kevin L Beebe	director	ONE ALLIED DRIVE, LITTLE ROCK AR 72202
Marc Montagner	officer: EVP - Finance	C/O ENDURANCE INT'L GROUP HOLDINGS, INC., 10 CORPORATE DRIVE, SUITE 300, BURLINGTON MA 01803
Laurie Bowen	director	C/O SBA COMMUNICATIONS CORPORATION, 8051 CONGRESS AVENUE, BOCA RATON FL 33487
Amy E Wilson	director	2211 H.H. DOW WAY, MIDLAND MI 48674
Richard M Cane	officer: EVP; Pres. - International	C/O SBA COMMUNICATIONS CORPORATION, 8051 CONGRESS AVENUE, BOCA RATON FL 33487
Duncan Cocroft	director	9 WEST 57TH STREET, 37TH FLOOR, NEW YORK NY 10019
Jay Lecoryelle Johnson	director	C/O DIAMONDROCK HOSPITALITY COMPANY, 2 BETHESDA METRO CENTER, SUITE 1400, BETHESDA MD 20814
Kurt L Bagwell	officer: Chief Operating Officer	SBA COMMUNICATIONS CORP, 5900 BROKEN SOUND PKWY, BOCA RATON FL 33487