Ohio Valley Banc (Ohio Valley Banc) Predictability Rank

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What is Ohio Valley Banc 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.

Ohio Valley Banc 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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Ohio Valley Banc (Ohio Valley Banc) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » Ohio Valley Banc Corporation (NAS:OVBC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

420 Third Avenue, PO Box 240, Gallipolis, OH, USA, 45631

Website

https://www.ovbc.com

Ohio Valley Banc Corporation is a financial holding company. The bank is a full-service financial institution offering a blend of commercial and consumer banking services within Southeastern Ohio as well as western West Virginia. The banking services offered by the bank include the acceptance of deposits in checking, savings, time and money market accounts; the making and servicing of personal, commercial, and student loans; and the making of construction and real estate loans. It also offers individual retirement accounts, safe deposit boxes, wire transfers and other standard banking products and services. The bank segmented its operating activities into two reportable segments, Banking and Consumer Finance. The majority of its total revenue is derived from the Banking segment.

Executives

Edward Bryant Roberts	director	420 THIRD AVENUE, PO BOX 240, GALLIPOLIS OH 45631
Bryan F Stepp	officer: SVP and CCO	420 THIRD AVENUE, P O BOX 240, GALLIPOLIS OH 45631-0240
Anna P Barnitz	director	P.O. BOX 240, 420 3RD AVE., GALLIPOLIS OH 45631-0240
Edward Allen Bell	other: Not a reporting person	5521 OHIO RIVER ROAD, POINT PLEASANT WV 25550
Ryan Joseph Jones	officer: RISK OFFICER/COO	420 THIRD AVENUE, GALLIPOLIS OH 45631
Brent A Saunders	director	P.O. BOX 240, 420 3RD AVE., GALLIPOLIS OH 45631-0240
Kevin Ryan Smith	director	420 THIRD AVENUE, P.O. BOX 240, GALLIPOLIS OH 45631
David W Thomas	director	1204 BROKEN BOW CT, WESTERVILLE OH 43081-3262
Katrinka V Hart	officer: Vice President of OVBC	P.O. BOX 240, 420 3RD AVE., GALLIPOLIS OH 45631-0240
Edward J Robbins	director	420 THIRD AVENUE P O BOX 240, GALLIPOLIS OH 45631
Thomas E Wiseman	director	P.O. BOX 240, 420 3RD AVE., GALLIPOLIS OH 45631-0240
Kimberly A Canady	director	420 THIRD AVENUE P O BOX 240, GALLIPOLIS OH 45631
Jeffrey E Smith	director, officer: President and CEO of OVBC	P.O. BOX 240, 420 3RD AVE., GALLIPOLIS OH 45631-0240
John G Jones	director	420 THIRD AVENUE, P O BOX 240, GALLIPOLIS OH 45631
Harold A Howe	director, officer: Vice President of OVBC	P.O. BOX 240, 420 3RD AVE., GALLIPOLIS OH 45631-0240