What is Ascent Capital Group 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.
Ascent Capital 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
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
Ascent Capital Group (Ascent Capital Group) Business Description
Traded in Other Exchanges
N/A
Address
5251 DTC Parkway, Suite 1000, Greenwood Village, CO, USA, 80111
Ascent Capital Group Inc is a provider of security systems and security monitoring services. The company operates two segments: monitronics and livewatch. Monitronics offers security alarm services, including monitoring signals arising from burglaries, fires, and medical alerts, and provides customer services and technical support. The company outsources the installation and most field services to its dealers and focuses on fees charged under alarm-monitoring contracts. Livewatch is a do-it-yourself home security provider that generates revenue through the sale of equipment and monitoring contracts. The company operates in the United States of America and Canada.
Executives
| Thomas Patrick Mcmillin |
director |
C/O WIDEOPENWEST, INC., 7887 EAST BELLEVIEW AVENUE, SUITE 1000, ENGLEWOOD CO 80111 |
| John C Malone |
10 percent owner |
12300 LIBERTY BLVD, ENGLEWOOD CO 80112 |
| Jeffery R Gardner |
director, officer: Executive Vice President |
ONE ALLIED DRIVE, LITTLE ROCK AR 72202 |
| William R Fitzgerald |
director, 10 percent owner, officer: Chairman |
2431 EAST 61ST STREET STE 800, TULSA OK 74136 |
| Charles Y Tanabe |
director |
123 LIBERTY BLVD, ENGLEWOOD CO 80112 |
| Brigade Capital Management, Lp |
10 percent owner |
399 PARK AVENUE, 16TH FLOOR, NEW YORK NY 10022 |
| Brigade Capital Management Gp, Llc |
10 percent owner |
399 PARK AVENUE, 16TH FLOOR, NEW YORK NY 10022 |
| Morgan Donald E Iii |
10 percent owner |
C/O BRIGADE CAPITAL MANAGEMENT, LLC, 717 FIFTH AVENUE, SUITE 1301, NEW YORK NY 10022 |
| Brigade Leveraged Capital Structures Fund Ltd. |
10 percent owner |
ONE NEXUS WAY, CAMANA BAY, GRAND CAYMAN E9 KY1-9005 |
| Ahmet H Okumus |
10 percent owner |
C/O OKUMUS FUND MANAGEMENT LTD., 767 THIRD AVENUE, 35TH FLOOR, NEW YORK NY 10022 |
| Okumus Fund Management Ltd. |
10 percent owner |
767 THIRD AVENUE, 35TH FLOOR, NEW YORK NY 10017 |
| Okumus Opportunistic Value Fund Ltd. |
10 percent owner |
CRAIGMUIR CHAMBERS, SUITE 71, ROAD TOWN, TORTOLA D8 VG 1110 |
| Carl E Vogel |
director |
C/O SIRIUS XM RADIO INC., 1221 AVENUE OF THE AMERICAS, NEW YORK NY 10020 |
| Brian Deevy |
director |
C/O TICKETMASTER, 8800 WEST SUNSET BLVD., WEST HOLLYWOOD CA 90069 |
| Richard Walker |
officer: Executive Vice President |
C/O SERVICESOURCE INTERNATIONAL, INC., 717 17TH STREET, 5TH FLOOR, DENVER CO 80202 |
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