Galaxy Gaming (Galaxy Gaming) Predictability Rank

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What is Galaxy Gaming 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.

Galaxy Gaming 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

Galaxy Gaming Predictability Rank Related Terms

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Galaxy Gaming (Galaxy Gaming) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Galaxy Gaming Inc (OTCPK:GLXZ) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

6480 Cameron Street, Suite 305, Las Vegas, NV, USA, 89118

Website

https://www.galaxygaming.com

Galaxy Gaming Inc develops, acquires, assembles, and markets technology and entertainment-based products and services for the gaming industry for placement on casino floors and on legal internet gaming sites. Its products and services are related to licensed casino operators' table game activities and focus on either increasing profitability, productivity, and security or expanding gaming entertainment offerings in the form of proprietary table games, electronically enhanced table game platforms, and fully automated electronic tables and other ancillary equipment. In addition, it licenses intellectual property to legal internet gaming operators. Its products are assembled at headquarters in Las Vegas, Nevada, as well as outsourced for certain sub-assemblies in the United States.

Executives

Hagerty Harry C Iii	officer: CFO	6767 SPENCER STREET, LAS VEGAS NV 89119
Meredith B. Brill	director	52 HILLHURST BLVD, TORONTO A6 M5N 1N6
Cheryl Kondra	director	6480 CAMERON STREET, SUITE 305, LAS VEGAS NV 89118
Mark A Lipparelli	director	6595 S JONES BLVD, LAS VEGAS, NV, USA NV 89118
Todd P Cravens	officer: CEO	6767 SPENCER STREET, LAS VEGAS NV 89119
Michael Gavin Isaacs	director	BALLY TECHNOLOGIES, INC., 6601 BERMUDA ROAD, LAS VEGAS NV 89119
William A Zender	director	296 DOE RUN CIRCLE, HENDERSON NV 89012
Bryan W. Waters	director	240 MONTE VISTA RIDGE ROAD, ORINDA CA 94563
Norman H Desrosiers	director	6987 VINNEDGE LANE, #119, HIGHLAND NV 92346
Triangulum Partners, Llc.	10 percent owner	6767 SPENCER ST, LAS VEGAS NV 89119
Robert B. Saucier	director, 10 percent owner, officer: CEO, CFO	6980 O'BANNON DRIVE, LAS VEGAS NV 89117
Gary Anthony Vecchiarelli	officer: Chief Financial Officer	6980 OBANNON DRIVE, LAS VEGAS NV 89117
Alixandra Saucier Regulatory Trust	other: Affiliated Trust	698O O'BANNON DRIVE, LAS VEGAS NV 89117
William E O'hara	officer: COO	6980 O'BANNON DRIVE, LAS VEGAS NV 89117
Patrick Mcnevin	director	5205 E. LINCOLN DR., PARADISE VALLEY AZ 85253