What is Rezolute Predictability Rank?
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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.
Rezolute 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
Rezolute (Rezolute) Business Description
Traded in Other Exchanges
N/A
Address
275 Shoreline Drive, Suite 500, Redwood City, CA, USA, 94065
Rezolute Inc is a biopharmaceutical company. The company develops novel, sustained-release injectable therapies. It applies proprietary formulation and manufacturing capabilities to known, well-characterized molecules to create differentiated, patent-protected therapies that have the potential to significantly improve existing standards of care. Its pipeline products include RZ358 and RZ402.
Executives
| Brian Kenneth Roberts |
officer: Chief Medical Officer |
C/O REZOLUTE, INC., 201 REDWOOD SHORES PARKWAY, SUITE 315, REDWOOD CITY CA 94065 |
| Gil M Labrucherie |
director |
150 INDUSTRIAL ROAD, SAN CARLOS CA 94070 |
| Wladimir Hogenhuis |
director |
60 LEVERONI COURT, NOVATO CA 94949 |
| Nerissa Kreher |
director |
C/O AVROBIO, INC., ONE KENDALL SQ., BLDG. 300, STE. 201, CAMBRIDGE MA 02139 |
| Handok, Inc. |
10 percent owner |
132, TEHERAN-RO, GANGNAM GU, SOUL M5 06235 |
| Philippe Fauchet |
director |
C/O REZOLUTE, INC., 201 REDWOOD SHORES PARKWAY, SUITE 315, REDWOOD CITY CA 94065 |
| Junghee Lim |
director |
C/O REZOLUTE, INC., 201 REDWOOD SHORE'S PARKWAY, SUITE 315, REDWOOD CITY CA 94065 |
| Genexine Inc. |
10 percent owner |
700 DAEWANGPANGYO-RO, KOREA PARKBLDG. B, BUNDANG-GU, SEONGNAM-SI, GYEONGGI-DO M5 13488 |
| Seline E. Miller |
officer: VP Finance & CAO |
C/O REZOLUTE, INC., 1450 INFINITE DRIVE, LOUISVILLE CO 80027 |
| Young-jin Kim |
director |
49, BONGEUNSA-RO 49-GIL, GANGNAM-GU, SEOUL M5 06100 |
| Young Chul Sung |
director |
101DONG 404HO, PARKTOWER APT. 69, SEOBINGGO-RO, YONGSAN-GU, SEOUL M5 04385 |
| Keith A. Vendola |
officer: Chief Financial Officer |
111 LIVORNO WAY, REDWOOD CITY CA 94065 |
| Xoma Corp |
10 percent owner |
2200 POWELL STREET, SUITE 310, EMERYVILLE CA 94608 |
| David F Welch |
director |
C/O INFINERA CORPORATION, 140 CASPIAN COURT, SUNNYVALE CA 94089 |
| Morgan Fields |
officer: Chief Accounting Officer |
890 SANTA CRUZ AVE., MENLO PARK CA 94025 |
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