PTC (PTC) Predictability Rank

View and export this data going back to 1989. Start your Free Trial

What is PTC 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.

PTC 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

PTC Predictability Rank Related Terms

Thank you for viewing the detailed overview of PTC's Predictability Rank provided by GuruFocus.com. Please click on the following links to see related term pages.

PTC (PTC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » PTC Inc (NAS:PTC) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

PTC:Mexico PMTA:Germany PMTA:Germany

Address

121 Seaport Boulevard, Boston, MA, USA, 02210

Website

https://www.ptc.com

PTC offers high-end computer-assisted design (Creo) and product lifecycle management (Windchill) software as well as Internet of Things and AR industrial solutions. Founded in 1985, PTC has 28,000 customers, with revenue stemming mostly from North America (45%) and Europe (40%).

Executives

Robert Schechter	director	C/O NMS COMMUNICATIONS, 100 CROSSING BLVD, FRAMINGHAM MA 01702
Kristian Talvitie	officer: Chief Financial Officer	121 SEAPORT BOULEVARD, BOSTON MA 02210
Michael Ditullio	officer: EVP	121 SEAPORT BLVD, BOSTON MA 02210
Von Staats Aaron C	officer: SVP, General Counsel and Clerk	C/O PARAMETRIC TECHNOLOGY CORP, 140 KENDRICK ST, NEEDHAM MA 02494
Catherine Kniker	officer: Chief Strategy Officer	C/O 121 SEAPORT BOULEVARD, BOSTON MA 02210
Paul A Lacy	director	KRONOS INCORP, 297 BILLERICA RD, CHELMSFORD MA 01824
Lathan Corinna	director	140 KENDRICK STREET, NEEDHAM MA 02494
Blake D. Moret	director	C/O ROCKWELL AUTOMATION, INC., 1201 SOUTH SECOND STREET, MILWAUKEE WI 53204
Neil Barua	director, officer: CEO-Elect	C/O SERVICEMAX, INC., 4450 ROSEWOOD DRIVE #200, PLEASANTON CA 94588
Janesh Moorjani	director	C/O ELASTIC N.V., 800 WEST EL CAMINO REAL, SUITE 350, MOUNTAIN VIEW CA 94040
Michal Katz	director	42 ROCK SHELTER ROAD, WACCABUC NY 10597
James E Heppelmann	officer: EVP, Chief Product Officer	C/O PARAMETRIC TECHNOLOGY CORP, 140 KENDRICK ST., NEEDHAM MA 02494
Amarpreet Hanspal	director	AUTODESK, INC., 111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
Phillip M Fernandez	director	C/O MARKETO, INC., 901 MARINER'S ISLAND BLVD., SUITE 500, SAN MATEO CA 94404
Mark D Benjamin	director	NUANCE COMMUNICATIONS, INC., 1 WAYSIDE ROAD, BURLINGTON MA 01803