Perpetua Resources (Perpetua Resources) Predictability Rank

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What is Perpetua Resources 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.

Perpetua Resources 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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Perpetua Resources (Perpetua Resources) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Metals & Mining » Perpetua Resources Corp (NAS:PPTA) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

PPTA:Canada

Address

405 S 8th Street, Suite 201, Boise, ID, USA, 83702

Website

https://www.perpetuaresources.com

Perpetua Resources Corp is focused on the exploration, site restoration, and redevelopment of gold-antimony-silver deposits in the Stibnite-Yellow Pine district of central Idaho that are encompassed by the Stibnite Gold Project. The Project is one of the highest-grade, open-pit gold deposits in the United States and is designed to apply a modern, responsible mining approach to restore an abandoned mine site and produce both gold and the only mined source of antimony in the United States. It has one segment, mineral exploration in the United States.

Executives

Chris J Robison	director	6363 SOUTH FIDDLER'S GREEN CIRCLE, GREENWOOD VILLAGE CO 80111
L Michael Bogert	officer: See remarks.	COEUR D'ALENE MINES CORPORATION, 505 FRONT AVENUE, P.O. BOX I, COEUR D'ALENE ID 83816
Laurel Sayer	director, officer: See remarks.	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Michael Stephen Wright	officer: See remarks.	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Alan Douglas Haslam	officer: See remarks.	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Richie Darrin Haddock	director	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Jessica Marie Largent	officer: See remarks.	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Tanya Dawn Nelson	officer: See remarks.	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Mckinsey Margaret Lyon	officer: See remarks.	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
David Deisley	director	C/O NOVAGOLD RESOURCES INC., 201 SOUTH MAIN STREET, SUITE 400, SALT LAKE CITY UT 84111
Laura Dove	director	405 S 8TH STREET, SUITE 201, BOISE ID 83702
Marcelo Kim	director	C/O PAULSON & CO. INC., 1251 AVENUE OF THE AMERICAS, NEW YORK NY 10020
Alexander Mcleod Sternhell	director	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Robert Alan Dean	director	405 S. 8TH STREET, SUITE 201, BOISE ID 83702
Paulson Partners Lp	other: Member of 10% Owner Group	1251 AVENUE OF THE AMERICAS, NEW YORK NY 10020