Triumph Group (Triumph Group) Predictability Rank

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What is Triumph Group 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.

Triumph Group 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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Triumph Group (Triumph Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Aerospace & Defense » Triumph Group Inc (NYSE:TGI) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

TG7:Germany

Address

555 E Lancaster Avenue, Suite 400, Radnor, PA, USA, 19087

Website

https://www.triumphgroup.com

Triumph Group Inc designs and manufactures a broad portfolio of aerostructures, aircraft components, and systems for the aviation industry. It serves a worldwide customer base of players in the commercial, business, and military markets. The company operates under two operating segments: Systems and Support, which designs, develops, and supports proprietary components; and Interiors, which supplies commercial and regional manufacturers with aircraft interior systems.

Executives

Quigley Thomas A. Iii	officer: Vice President and Controller	C/O TRIUMPH GROUP, INC., 899 CASSATT ROAD, SUITE 210, BERWYN PA 19312
Neal J Keating	director	C/O KAMAN CORPORATION, PO BOX 1, BLOOMFIELD CT 06002
Mather Courtney	director	C/O ICAHN ENTERPRISES L.P., 16690 COLLINS AVE., PH, SUNNY ISLES FL 33160
Patrick E Allen	director	400 COLLINS ROAD NE, CEDAR RAPIDS IA 52498
Daniel J Crowley	director, officer: President & CEO	870 WINTER STREET, WALTHAM MA 02451
Cynthia M Egnotovich	director
Kai W Kasiguran	officer: VP, Controller and PAO	899 CASSATT ROAD, SUITE 210, BERWYN PA 19312
Richard A Goglia	director	870 WINTER STREET, WALTHAM MA 02451
Wick Peter K. A.	officer: EVP, Aerospace Structures	899 CASSATT ROAD, SUITE 210, BERWYN PA 19312
Barbara Humpton	director	899 CASSATT ROAD, SUITE 210, BERWYN PA 19312
Repplier Colleen C	director	1205 KIMBALL BLVD., JASPER IN 47546
William L Mansfield	director	2301 INDUSTRIAL DR., NEENAH WI 54956
Adam Joseph Palmer	director	1001 PENNSYLVANIA AVENUE, NW, SUITE 220 S, WASHINGTON DC 20004
Paul Bourgon	director	1550 LIBERTY RIDGE DRIVE, SUITE 100, WAYNE PA 19464
Daniel P Garton	director	4333 AMON CARTER BLVD, FORT WORTH TX 76155