Vishay Intertechnology (Vishay Intertechnology) Predictability Rank

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What is Vishay Intertechnology 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.

Vishay Intertechnology 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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Vishay Intertechnology (Vishay Intertechnology) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Vishay Intertechnology Inc (NYSE:VSH) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

VHY:Germany

Address

63 Lancaster Avenue, Malvern, PA, USA, 19355-2143

Website

https://www.vishay.com

Vishay Intertechnology Inc provides a broad product portfolio of discrete semiconductors and passive electronic components to original equipment manufacturers and distributors. These products are found in industrial, computing, automotive, consumer, telecommunications, power supplies, military, aerospace, and medical markets and serve customer worldwide. Its product segments consist of two general classes: semiconductors and passive components. The company's operating segment includes metal oxide semiconductor field-effect transistors, diodes, optoelectronic components, resistors, inductors, and capacitors. Revenue mainly comes from resistors, which are basic components used in all forms of electronic circuitry to adjust and regulate levels of voltage and current.

Executives

Marc Zandman	director, officer: ExecChairman & Chief Bus Dev	C/O VISHAY INTERTECHNOLOGY, INC., 63 LINCOLN HIGHWAY, MALVERN PA 19355
Abraham Ludomirski	director	SUITE 190, 7 GREAT VALLEY PARKWAY, MALVERN PA 19355
Joel Smejkal	director, officer: President and CEO	63 LANCASTER AVE, MALVERN PA 19355
Roy Shoshani	officer: EVP & Chief Technical Officer	63 LANCASTER AVE, MALVERN PA 19355
Peter Henrici	officer: EVP - Corporate Development	63 LANCASTER AVE, MALVERN PA 19355
Lori Lipcaman	officer: EVP & Chief Financial Officer	C/O VISHAY INTERTECHNOLOGY, INC., 63 LANCASTER AVENUE, MALVERN PA 19355
Jeffrey Allen Webster	officer: EVP & Chief Operating Officer	63 LANCASTER AVE, MALVERN PA 19355
Andreas Randebrock	officer: EVP - Global Human Resources	63 LANCASTER AVE, MALVERN PA 19355
Gerald Paul	director, officer: President and CEO
Raanan Zilberman	director	63 LANCASTER AVE, MALVERN PA 19355
Michiko Kurahashi	director	63 LANCASTER AVE, MALVERN PA 19355
Renee B Booth	director	C/O VISHAY INTERTECHNOLOGY, INC., 63 LANCASTER AVE, MALVERN PA 19355
Ziv Shoshani	director, officer: Exec. VP and COO	C/O VISHAY INTERTECHNOLOGY, INC., 63 LANCASTER AVE, MALVERN PA 19355
Ruta Zandman	director
Michael J Cody	director	EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748