Piperndler Cos (Piperndler Cos) Predictability Rank

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What is Piperndler Cos 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.

Piperndler Cos 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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Piperndler Cos (Piperndler Cos) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » Piper Sandler Cos (NYSE:PIPR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

PJR:Germany

Address

800 Nicollet Mall, Suite 900, Minneapolis, MN, USA, 55402

Website

https://www.pipersandler.com

Piper Sandler Cos is an investment banking company. Investment banking services include financial advisory services, management of and participation in underwriting, and public finance activities. It generates maximum revenue from Advisory services followed by Equity financing. The company focuses on the following sectors: healthcare; energy; consumer; diversified industrials and services; business services; technology; financial services; agriculture, clean technologies, and renewables, focusing on middle-market clients.

Executives

Debbra L. Schoneman	officer: Chief Financial Officer	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Chad R Abraham	officer: Co-Head Global IB and Cap Mkts	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Jonathan J Doyle	director, officer: Hd of Financial Services Group	800 NICOLLET MALL, MINNEAPOLIS MN 55402
John W Geelan	officer: General Counsel	800 NICOLLET MALL, SUITE 800, MINNEAPOLIS MN 55402
Robbin Mitchell	director	W56 N17000 RIDGEWOOD DRIVE, MENOMONEE FALLS WI 53051
Michael R Dillahunt	officer: Global Co-Head IB and Cap Mkts	800 NICOLLET MALL, SUITE 900, MINNEAPOLIS MN 55402
R Scott Larue	officer: Co-Head Global IB and Cap Mkts	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Brian R Sterling	director	800 NICOLLET MALL, SUITE 900, MINNEAPOLIS MN 55402
Timothy L Carter	officer: Chief Accounting Officer	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Victoria M Holt	director	PPG INDUSTRIES, INC., ONE PPG PLACE, PITTSBURGH PA 15272
James P Baker	officer: Global Co-Head IB and Cap Mkts	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Schreier Thomas S Jr	director	C/O NORTHWEST AIRLINES, 1689 NONCONNAN BLVD, MEMPHIS TN 38132
Fairman Francis E Iv	officer: Head, Public Finance Services	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Andrew S Duff	director, officer: Chairman and CEO	800 NICOLLET MALL, MINNEAPOLIS MN 55402
Christopher D Crawshaw	officer: Head of Asset Management	800 NICOLLET MALL, MINNEAPOLIS MN 55402