Adtalem Global Education (Adtalem Global Education) Predictability Rank

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What is Adtalem Global Education 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.

Adtalem Global Education 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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Adtalem Global Education (Adtalem Global Education) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Education » Adtalem Global Education Inc (NYSE:ATGE) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

DVY:Germany

Address

500 West Monroe Street, Suite 28, Chicago, IL, USA, 60661

Website

https://www.adtalem.com

Adtalem Global Education Inc is an American for-profit educational company that operates various university and educational programs. The company runs eight colleges and universities that specialize in business, medicine, education, and nursing degree programs. DeVry Education Group has over 90 campuses as well as online courses that offer associate, bachelor, and postgraduate degrees. Enrollment in its business colleges represents almost half of overall student enrollment, followed by technology and healthcare. The company derives the majority of its revenue from student enrollment fees using federal financial aid programs such as Pell Fund grants.

Executives

Maurice Herrera	officer: Chief Marketing Officer	500 W. MONROE, 28TH FLOOR, CHICAGO IL 60661
Blake Simpson	officer: SVP, Chief Comms Officer	500 W. MONROE, SUITE 1300, CHICAGO IL 60661
Lisa W Wardell	director	5900 RYLAND DRIVE, BETHESDA MD 20817
Manjunath Gangadharan	officer: VP, Chief Accounting Officer	600 WEST CHICAGO AVE., STE 400, CHICAGO IL 60654
William W Burke	director	3868 MOCKINGBIRD LN, DALLAS TX 75205
Lyle Logan	director	ONE TOWER LANE, OAKBROOK TERRACE IL 60181
Evan Trent	officer: SVP, Chief Strat. & Transform	500 W. MONROE, 28TH FLOOR, CHICAGO IL 60661
William V Krehbiel	director	500 W. MONROE, CHICAGO IL 60661
James Raymond Bartholomew	officer: President, DeVry University	2449 MARCY AVENUE, EVANSTON IL 60201
Michael Betz	officer: President, Walden University	500 W. MONROE, 28TH FLOOR, CHICAGO IL 60661
Cheryl James	officer: SVP, CHRO	500 W. MONROE, 28TH FLOOR, CHICAGO IL 60661
Sharon O'keefe	director	C/O VOCERA COMMUNICATIONS, INC., 525 RACE STREET, SAN JOSE CA 95126
Michael W Malafronte	director	INTERNATIONAL VALUE ADVISERS, LLC, 717 FIFTH AVE, 10TH FLOOR, NEW YORK NY 10022
Georgette D. Kiser	director	1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505
Kenneth J Phelan	director	HUNTINGTON BANCSHARES INCORPORATED, 41 S. HIGH STREET, COLUMBUS OH 43215