Eastside Distilling (Eastside Distilling) Predictability Rank

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What is Eastside Distilling 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.

Eastside Distilling 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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Eastside Distilling (Eastside Distilling) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Alcoholic » Eastside Distilling Inc (NAS:EAST) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

2321 NE Argyle Street, Unit D, Portland, OR, USA, 97211

Website

https://www.eastsidedistilling.com

Eastside Distilling Inc is a producer and marketer of Craft Canning + Printing and spirits. Its alcoholic beverage categories include whiskey, vodka, gin, rum, tequila, and Ready-to-Drink. Some of its brands include Azunia Tequila, Hue-Hue Coffee Rum, Portland Potato Vodka, and Burnside Whiskey. It operates in a two segment of packaging, producing, marketing, and distributing alcoholic beverages. Craft Canning + Printing includes, Digital Can Printing, Co-packing Facility and Mobile Canning. The company distributes its products in 33 states of the United States.

Executives

Elizabeth Ann Levy-navarro	director	C/O EASTSIDE DISTILLING, INC., 8911 NE MARX DRIVE, SUITE A2, PORTLAND OR 97220
Eric J. Finnsson	director	C/O EASTSIDE DISTILLING, INC., 1001 SE WATER AVENUE, #390 OR 97214
Bigger Capital Fund Gp, Llc	10 percent owner	11700 W CHARLESTON BLVD 170-659, LAS VEGAS NV 89135
Bigger Capital, Llc	10 percent owner	11700 W CHARLESTON BLVD 170-659, LAS VEGAS NV 89135
District 2 Gp Llc	10 percent owner	14 WALL STREET, 2ND FLOOR, HUNTINGTON NY 11743
District 2 Holdings Llc	10 percent owner	14 WALL STREET, 2ND FLOOR, HUNTINGTON NY 11743
Bigger Capital Fund L P	10 percent owner	159 JENNINGS RD, COLD SPRING HARBOR NY 11724
District 2 Capital Fund Lp	10 percent owner	14 WALL STREET, 2ND FLOOR, HUNTINGTON NY 11743
B.a.d. Company, Llc	10 percent owner	11700 W CHARLESTON BLVD 170-659, LAS VEGAS NV 89135
District 2 Capital Lp	10 percent owner	175 W CARVER STREET, HUNTINGTON NY 11743
Michael Bigger	10 percent owner	11700 W CHARLESTON BLVD 170-659, LAS VEGAS NV 89135
Geoffrey C Gwin	officer: Chief Financial Officer	238 BLACK ROCK TPK, REDDING CT 06896
Joseph D Giansante	director	2321 NE ARGYLE STREET, UNIT D, PORTLAND OR 97211
Patrick J. Kilkenny	10 percent owner	P.O. BOX 1641, RANCHO SANTA FE CA 92067
Amy Lee Brassard	officer: Corporate Secretary	8911 NE MARX DRIVE, SUITE A2, PORTLAND OR 97220