Kontoor Brands (Kontoor Brands) Predictability Rank

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What is Kontoor Brands 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.

Kontoor Brands 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

Kontoor Brands Predictability Rank Related Terms

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Kontoor Brands (Kontoor Brands) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » Kontoor Brands Inc (NYSE:KTB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

3KO:Germany 3KO:Germany

Address

400 N. Elm Street, Greensboro, NC, USA, 27401

Website

https://www.kontoorbrands.com

Kontoor Brands Inc is a lifestyle apparel company. It is engaged in designing, manufacturing, sourcing, marketing, and distribution of its portfolio of brands, including Wrangler and Lee. It manufactures its products in owned and leased facilities and distributes the products through both brick and mortar and e-commerce retailers. It generates the majority of its revenue from the Wrangler segment. The company's geographical segments are the United States and International, of which the majority of its revenue comes from the United States.

Executives

Susan Denise Sumner	officer: VP & CAO	400 N. ELM STREET, GREENSBORO NC 27401
Joseph A Alkire	officer: EVP & Chief Financial Officer	C/O KONTOOR BRANDS, INC., 400 N. ELM STREET, GREENSBORO NC 27401
Thomas E. Waldron	officer: VP & GB President - Wrangler	400 NORTH ELM STREET, GREENSBORO NC 27401
Andrew E Page	director	C/O FOOT LOCKER, INC., 330 WEST 34TH STREET, NEW YORK NY 10001
Doerr Thomas L Jr	officer: EVP, GC, & Corp. Sec.	ONE PARK PLAZA, 11270 W. PARK PLACE, SUITE 1000, MILWAUKEE WI 53224
Ashley Goldsmith	director	400 N. ELM STREET, GREENSBORO NC 27401
Scott H Baxter	director, officer: President & CEO	400 NORTH ELM STREET, GREENSBORO NC 27401
Laurel Krueger	officer: VP, GC & Corporate Secretary	ONE EXPRESS DRIVE, COLUMBUS OH 43230
Mark L. Schiller	director	C/O THE HAIN CELESTIAL GROUP, INC., 1111 MARCUS AVENUE, LAKE SUCCESS NY 11042
Robert Lynch	director	P. O. BOX 99900, LOUISVILLE KY 40269
Richard Carucci	director	1441 GARDINER LANE, LOUISVILLE KY 47113
Juliana L Chugg	director	1200 WILLOW LAKE BOULEVARD, PO BOX 64683, ST PAUL MN 55164-0683
Rich Williams	director	600 W. CHICAGO AVENUE SUITE 400, CHICAGO IL 60654
Rustin Welton	officer: VP & CFO	400 NORTH ELM STREET, GREENSBORO NC 27401
Christopher Waldeck	officer: VP & GB President - Lee	400 NORTH ELM STREET, GREENSBORO NC 27401