Signet Jewelers (Signet Jewelers) Predictability Rank

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What is Signet Jewelers 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.

Signet Jewelers 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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Signet Jewelers (Signet Jewelers) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Signet Jewelers Ltd (NYSE:SIG) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

SZ2:Germany

Address

2 Church Street, Clarendon House, Hamilton, BMU, HM11

Website

https://www.signetjewelers.com

Signet Jewelers Ltd is a retailer of diamond jewelry. Its merchandise mix includes bridal, fashion, watches and others. The bridal category includes engagement, wedding and anniversary purchases. Its segments are the North America segment, the International segment, and the Other segment. The North America segment contributes to the majority of the revenue.

Executives

Virginia Drosos	director, officer: Chief Executive Officer	CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON D0 HM11
Howard A Melnick	officer: Chief Information Officer	C/O SIGNET JEWELERS LIMITED, 375 GHENT ROAD, AKRON OH 44333
Mary Elizabeth Finn	officer: Chief People Officer	770 BROADWAY, NEW YORK NY 10003
Stash Ptak	officer: * See Remarks	375 GHENT RD, AKRON OH 44333
William Brace	officer: See Remarks	375 GHENT RD, AKRON OH 44333
Joan M Hilson	officer: Chief Financial Officer	150 THORN HILL DRIVE, WARRENDALE PA 15086-7528
Oded Edelman	officer: President of JamesAllen.com	CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON D0 HM11
Stephen E. Lovejoy	officer: Chief Supply Chain Officer	C/O SIGNET JEWELERS LIMITED, 375 GHENT ROAD, AKRON OH 44333
Zackery A Hicks	director	C/O SIGNET JEWELERS LIMITED, 375 GHENT ROAD, AKRON OH 44333
Brian A Tilzer	director	CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON D0 HM11
Rebecca Wooters	officer: Chief Digital Officer	375 GHENT RD, AKRON OH 44333
Jamie Singleton	officer: See Remarks	9797 ROMBAUER, DALLAS TX 75019
Helen Mccluskey	director	2211 REDDING ROAD, FAIRFIELD CT 06430
Eugenia Ulasewicz	director	CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON D0 HM11
H. Todd Stitzer	director	CLARENDON HOUSE, 2 CHURCH STREET, HAMILTON D0 HM11