Nicolet Bankshares (Nicolet Bankshares) Predictability Rank

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What is Nicolet Bankshares 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.

Nicolet Bankshares 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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Nicolet Bankshares (Nicolet Bankshares) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Nicolet Bankshares Inc (NYSE:NIC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

111 North Washington Street, Green Bay, WI, USA, 54301

Website

https://www.nicoletbank.com

Nicolet Bankshares Inc is a United States-based bank holding company engaged in banking, consisting of lending and deposit gathering, ancillary banking-related products and services, to businesses and individuals. It offers a variety of loans, deposits, and related services to business customers especially small and medium-sized businesses and professional concerns, business deposit products, cash management services, international banking services, business loans, lines of credit, commercial real estate financing, construction loans, agricultural real estate or production loans, and letters of credit, as well as retirement plan services.

Executives

Eric James Witczak	officer: EVP - Nicolet National Bank	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Patrick Joseph Madson	officer: SVP-Wealth Mgmt-NicoletNatBank	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Robert Bruce Atwell	director, officer: Pres. and Chief Executive Off.	C/O NICOLET NATIONAL BANK, 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Susan L Merkatoris	director	C/O NICOLET NATIONAL BANK, 111 NORTH WASHINGTON ST, GREEN BAY WI 54301
Michael E Daniels	director, officer: EVP and Secretary	C/O NICOLET NATIONAL BANK, 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Brad Vincent Hutjens	officer: SVP - CCO - Nicolet Natl Bank	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Glen E Tellock	director	1725 SHEPHERD ROAD, CHATTANOOGA TN 37421
Hector Colon	director	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Moore Hubert Phillip Jr	officer: CFO	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Brenda L Johnson	director	C/O NICOLET BANKSHARES, INC., 111 N. WASHINGTON STREET, GREEN BAY WI 54301
Christopher J. Ghidorzi	director	C/O NICOLET NATIONAL BANK, 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
John Nicholas Dykema	director	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Marcia M Anderson	director	133 S BLAIR STREET, PO BOX 1231, MADISON WI 53701-1231
Robert J Weyers	director	C/O NICOLET NATIONAL BANK, 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301
Eric Peter Radzak	officer: Corp Dev Off Nicolet Nat Bank	C/O NICOLET BANKSHARES, INC., 111 NORTH WASHINGTON STREET, GREEN BAY WI 54301