Bemis Co (Bemis Co) Predictability Rank

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What is Bemis Co 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.

Bemis Co 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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Bemis Co (Bemis Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Packaging & Containers » Bemis Co Inc (NYSE:BMS) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

2301 Industrial Drive, Neenah, WI, USA, 54957-0669

Website

http://www.bemis.com

Bemis manufactures flexible packaging, primarily for the food industry, but also for the medical and consumer product industries. In coming years, we expect the company to look to make bolt-on acquisitions and invest in higher-end packaging technologies.

Executives

Deursen Holly Van	director	21211 NORDHOFF STREET, CHATSWORTH CA 91311
William E Jackson	officer: Senior Vice President	ONE NEENAH CENTER, 4TH FLOOR P.O. BOX 669 NEENAH WI 54957
Adele M. Gulfo	director	ONE NEENAH CENTER, 4TH FLOOR, P.O. BOX 669, NEENAH WI 54957
William F. Austen	director, officer: President & CEO	222 SOUTH 9TH STREET, SUITE 2300, MINNEAPOLIS MN 55402-4099
Robert H Yanker	director	3505 RIVERLY ROAD, ATLANTA GA 30327
Michael B Clauer	officer: Senior Vice President
Marran H. Ogilvie	director	599 LEXINGTON AVENUE, NEW YORK NY 10022
Philip G Weaver	director	COOPER TIRE & RUBBER CO, 701 LIMA AVE, FINDLAY OH 45840
Arun Nayar	director	9 MARSHAL LANE, WESTON CT 06883
Louis Fred Stephan	officer: President Bemis North America	2301 INDUSTRIAL DRIVE, NEENAH WI 54956
David T Szczupak	director	WHIRLPOOL CORPORATION, 2000 M63N, BENTON HARBOR MI 49022
Sheri H. Edison	officer: Chief Legal Officer	1069 STATE ROUTE 46 EAST, BATESVILLE IN 47006
Timothy Manganello	director, other: Chairman of the Board	3850 HAMLIN RD., AUBURN HILLS MI 48326
David S Haffner	director
Guillermo Novo	director	AIR PRODUCTS AND CHEMICALS, INC., 7201 HAMILTON BOULEVARD, ALLENTOWN PA 18195