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Entravision Communications (Entravision Communications) Predictability Rank


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What is Entravision Communications Predictability Rank?

1 (5)

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.


Entravision Communications 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

Entravision Communications Predictability Rank Related Terms

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Entravision Communications (Entravision Communications) Business Description

Traded in Other Exchanges
Address
2425 Olympic Boulevard, Suite 6000 West, Santa Monica, CA, USA, 90404
Entravision Communications Corp is a global media company. Its operations encompass integrated marketing and media solutions, comprised of television, radio, and digital properties and data analytics services. The company operates in television broadcasting, radio broadcasting, and digital media segments. It owns and operates more than 45 radio stations in 16 U.S. markets. The radio stations consist of approx 38 FM and 10 AM stations located in Arizona, California, Colorado, Florida, Nevada, New Mexico, and Texas. It also provides digital advertising solutions that allow advertisers to reach online Hispanic audiences worldwide.
Executives
Michael J Christenson officer: Chief Executive Officer C/O ENTRAVISION COMMUNICATIONS CORP, 2425 OLYMPIC BLVD, STE 6000W, SANTA MONICA CA 90404
Lara Sweet director C/O SNAP INC., 2772 DONALD DOUGLAS LOOP NORTH, SANTA MONICA CA 90405
Thomas Strickler director C/O ENTRAVISION COMMUNICATIONS CORP, 2425 OLYMPIC BLVD STE 6000W, SANTA MONICA CA 90404
Brad Bender director C/O ENTRAVISION COMMUNICATIONS CORP, STE 6000W, SANTA MONICA CA 90404
Christopher T Young officer: President, Outdoor Division
Saldivar Von Wuthenau Juan director 2425 OLYMPIC BLVD., SUITE 6000W, SANTA MONICA CA 90404
Alexandra Seros 10 percent owner C/O ENTRAVISION COMMUNICATIONS CORP., 2425 OLYMPIC BLVD STE 6000 W, SANTA MONICA CA 90404
Seros Ulloa Family Trust Of 1996 10 percent owner C/O ENTRAVISION COMMUNICATIONS CORP., 2425 OLYMPIC BLVD STE 6000 W, SANTA MONICA CA 90404
Paul A Zevnik director ZEVNIK HORTON LLP, 1299 PENNSYLVANIA AVE NW 960E, WASHINGTON DC 20004
Gilbert R Vasquez director 2425 OLYMPIC BLVD., SUITE 6000W, SANTA MONICA CA 90404
Jeffrey A Liberman officer: President, Radio Division ENTRAVISION COMMUNICATIONS CORP, 2425 OLYMPIC BLVD, SANTA MONICA CA 90404
Arnoldo Avalos director 2425 OLYMPIC BLVD., SUITE 6000 WEST, SANTA MONICA CA 90404
Fehmi Alexander Zeko director C/O ATHENE HOLDING LTD., WASHINGTON HOUSE, 16 CHURCH STREET, HAMILTON D0 HM 11
Karl Alonso Meyer officer: Chief Revenue Officer 2425 OLYMPIC BOULEVARD, SUITE 6000 WEST, SANTA MONICA CA 90404
Mario M. Carrera officer: Chief Revenue Officer 2425 OLYMPIC BLVD., SUITE 6000 WEST, SANTA MONICA CA 90404