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Arteris (Arteris) Predictability Rank


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What is Arteris Predictability Rank?

Not Rated

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.

Arteris 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Arteris Predictability Rank Related Terms

Thank you for viewing the detailed overview of Arteris's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

Arteris (Arteris) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Semiconductors » Arteris Inc (NAS:AIP) » Definitions » Predictability Rank
Comparable Companies
MRAM VLN SQNS SKYT QUIK NLST MX NA PXLW NVEC NVDA TPE:2330 AVGO AMD INTC TXN QCOM ADI MU XKRX:000660
Traded in Other Exchanges
N/A
Address
595 Millich Drive, Suite 200, Campbell, CA, USA, 95008
Website
https://www.arteris.com
Arteris Inc is a developer of on-chip interconnect fabric technology designed for a variety of devices and in the development and distribution of Network-on-Chip (NoC) interconnect intellectual property (IP). The company's technology is used in System-on-Chip (SoC) and provides software and services to automate SoC integration, enabling users to efficiently deploy NoC IP, and offer IP support, maintenance services, professional services, and training and on-site support services.
Executives
Nicholas B. Hawkins officer: VP and Chief Financial Officer CORSAIR COMPONENTS INC., 46221 LANDING PARKWAY, FREMONT CA 94538
K Charles Janac director, 10 percent owner, officer: President and CEO C/O SMART MACHINES INC, 651 RIVER OAKS PARKWAY, SAN HOSE CA 95135
Laurent R Moll officer: Chief Operating Officer C/O ARTERIS, INC., 595 MILLICH DR., SUITE 200, CAMPBELL CA 95008
Paul L Alpern officer: VP and General Counsel C/O ARTERIS, INC., 595 MILLICH DR., SUITE 200, CAMPBELL CA 95008
Wayne C Cantwell director C/O ARTERIS, INC., 595 MILLICH DR., SUITE 200, CAMPBELL CA 95008
Antonio J Viana director C/O ARTERIS, INC., 595 MILLICH DR., SUITE 200, CAMPBELL CA 95008
Raman Chitkara director 2100 LOGIC DRIVE, SAN JOSE CA 95124
Claudia F. Munce director 7601 PENN AVENUE S., RICHFIELD MN 55423
Saiyed Atiq Raza director
Isabelle F Geday director C/O ARTERIS, INC., 595 MILLICH DR., SUITE 200, CAMPBELL CA 95008
Capital F Ventech 10 percent owner 47 AVENUE DE L'OPERA, PARIS I0 75002
Arteris Ip, Llc 10 percent owner 591 W. HAMILTON AVE, SUITE 250, CAMPBELL CA 95008
Christian Claussen director, 10 percent owner C/O ARTERIS, INC., 595 MILLICH DR., SUITE 200, CAMPBELL CA 95008