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Cat9 Group (Cat9 Group) Predictability Rank


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What is Cat9 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.

Cat9 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

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

Cat9 Group Predictability Rank Related Terms

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Cat9 Group (Cat9 Group) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Cat9 Group Inc (OTCPK:CATN) » Definitions » Predictability Rank
Comparable Companies
LMNR VFF ALCO APPH SHMP GCEH AQB AGFS PME VITL ADX:IHC ADM SZSE:002714 TSN SHSE:600438 SGX:F34 BG SZSE:300498 OSL:MOWI BOM:543458
Traded in Other Exchanges
N/A
Address
No. 387, Tianren Road, Room 2001, Dading Century Square, Wuhou District, Sichuan Province, Chengdu, CHN, 610000
Website
http://www.cat9group.com
Cat9 Group Inc is engaged in the acquisition of land for the planting of Acer Truncatum trees and harvesting of Acer Truncatum seeds to produce edible oil. Its products include Acer truncatum seed oil) and Acer truncatum (capsules).
Executives
Liangqin Yi 10 percent owner, officer: CFO and Secretary 3-2-1404, CHANGCHENG NANYUAN, NO. 319, TIANHE WEST 2ND STREET, HI-TECH ZONE CHENGDU CITY, SICHUAN PROVINCE F4 610000
Wenfa Simon Sun director, 10 percent owner, officer: President, CEO & Chairman ROOM 2001, DADING CENTURY SQUARE NO. 387 TIANREN ROAD, WUHOU DISTRICT CHENGDU F4 610000
Qian Sanya Meihong 10 percent owner, officer: CFO and Secretary CHONGQING BANAN DISTRICT YUDONG YINGDAN PLAZA 63-3 CHONGQING F4 401320
Suyun Cao officer: CFO and Secretary ROOM 2001, DADING CENTURY SQUARE, NO. 38 TIANREN ROAD, WUHOU DISTRICT, CHENGDU SICHUAN PROVINCE F4 610000
Guofu Industry Development Ltd 10 percent owner 12/F SAN TOI BUILDING 137-139 CONNAUGHT ROAD CENTRAL HONG KONG K3 999077
Richard Chiang other: Previous Officer and Director 460 BRANNAN STREET SUITE 78064, SAN FRANCISCO CA 94107
Chongqing Field Industrial Co Ltd. 10 percent owner CHONGQING BANAN DISTRICT YUDONG YINGDAN PLAZA 63-3 CHONGQING F4 401320

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