What is Offerpad Solutions 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.
Offerpad Solutions 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
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
Offerpad Solutions (Offerpad Solutions) Business Description
Traded in Other Exchanges
N/A
Address
2150 E. Germann Road, Suite 1, Chandler, AZ, USA, 85286
Offerpad Solutions Inc provides a way to buy and sell a home. It uses technology-enabled solutions to remake the home selling and buying experience by offering customers the convenience, control, and certainty to solve their housing needs. It combines fundamental real estate expertise with the data-driven digital Solutions Center platform to give users a holistic, customer-centric experience, enabling them to efficiently sell and buy their homes online with streamlined access to other services including mortgage, listing, and buyer representation services.
Executives
| Jawad A Ahsan |
officer: Chief Financial Officer |
17800 N 85TH ST, SCOTTSDALE AZ 85255 |
| Roberto Marco Sella |
director |
2400 MARKET STREET, SUITE 302, PHILADELPHIA PA 19103 |
| Kenneth D Degiorgio |
director |
|
| Ryan Ohara |
director |
6922 HOLLYWOOD BLVD., 12TH FL, LOS ANGELES CA 90028 |
| Stephen Michael Johnson |
officer: Chief Operating Officer |
C/O OFFERPAD SOLUTIONS INC., 2150 E GERMAN ROAD, SUITE 1, CHANDLER AZ 85286 |
| Benjamin Adam Aronovitch |
officer: Chief Legal Officer |
C/O OFFERPAD SOLUTIONS INC., 2150 E GERMAN ROAD, SUITE 1, CHANDLER AZ 85286 |
| Brian Bair |
director, officer: Chief Executive Officer |
C/O OFFERPAD SOLUTIONS INC., 2150 E GERMAN ROAD, SUITE 1, CHANDLER AZ 85286 |
| Katherine Curnutte |
director |
4301 50TH STREET, N.W., SUITE 300, PMB 1044, WASHINGTON DC 20007 |
| Ll Capital Partners I, L.p. |
10 percent owner |
C/O LL FUNDS, LLC, 2400 MARKET STREET, SUITE 302, PHILADELPHIA PA 19103 |
| Michael S. Burnett |
officer: Chief Financial Officer |
8601 NORTH SCOTTSDALE ROAD, SUITE 225, SCOTTSDALE AZ 85253 |
| First American Financial Corp |
10 percent owner |
1 FIRST AMERICAN WAY, SANTA ANA CA 92707 |
| Sheryl Palmer |
director |
4900 N. SCOTTSDALE ROAD, SUITE 2000, SCOTTSDALE AZ 85251 |
| Supernova Partners Llc |
10 percent owner |
4520 DEXTER STREET, N.W., WASHINGTON DC 20007 |
| Michael S. Clifton |
officer: Chief Financial Officer |
C/O SUPERNOVA PARTNERS ACQUISITION CO., 4520 DEXTER STREET, N.W., WASHINGTON DC 20007 |
| Gregg Renfrew |
director |
C/O SUPERNOVA PARTNERS ACQUISITION CO., 4520 DEXTER STREET, N.W., WASHINGTON DC 20007 |
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