What is Scorpius Holdings 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.
Scorpius Holdings 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
Scorpius Holdings (Scorpius Holdings) Business Description
Traded in Other Exchanges
Address
627 Davis Drive, Suite 300, Morrisville, NC, USA, 27560
NightHawk Biosciences Inc is a commercial-stage company with a fully integrated ecosystem to accelerate the discovery and development of novel therapies that arm the immune system. By leveraging its proprietary platforms, the company is advancing its first-in-class product portfolio with a focus on cancer and inflammatory and infectious diseases. Its current pipeline has categories: Oncology, immunology and molecular biology.
Executives
| Prendergast John K A |
director |
ROBERTS SHERIDAN & KOTEL, 12 EAST 49TH STREET 30TH FL, NEW YORK NY 10017 |
| Jeffrey Alan Wolf |
director, officer: Chief Executive Officer |
3985 RESEARCH PARK DRIVE, ANN ARBOR MI 48108 |
| Smith Edward B Iii |
director |
C/O BRIGHTLINE CAPITAL MANAGEMENT, LLC, 1120 AVE OF THE AMERICAS, SUITE 1505, NEW YORK NY 10036 |
| William L. Ostrander |
officer: CFO/Corp Secy |
801 CAPITOLA DRIVE, SUITE 12, DURHAM NC 27713 |
| John J Monahan |
director |
|
| Robert James Jakobs |
officer: VP Finance/Controller/Secty |
PO BOX 14487, DURHAM NC 27709 |
| Jeff Tobin Hutchins |
officer: Chief Scientific Officer |
15823 S. 4210 RD., CLAREMORE OK 74017 |
| Ann A Rosar |
officer: VP of Finance and Controller |
C/O 801 CAPITOLA DRIVE, DURHAM NC 27713 |
| Michael Kharitonov |
director |
100 EUROPA DRIVE, CHAPEL HILL NC 27517 |
| Timothy J Creech |
officer: Chief Financial Officer |
C/O TRIMERIS, INC., 3518 WESTGATE DR. SUITE 300, DURHAM NC 27707 |
| Stephen J. Dipalma |
officer: Interim CFO |
C/O SPERO THERAPEUTICS, INC., 675 MASSACHUSETTS AVENUE, 14TH FLOOR, CAMBRIDGE MA 02139 |
| Aristar Heat, Llc |
10 percent owner |
1120 AVENUE OF THE AMERICAS, SUITE 1514, NEW YORK NY 10036 |
| Aristar Capital Management, Llc |
10 percent owner |
1120 AVENUE OF THE AMERICAS, SUITE 1514, NEW YORK NY 10036 |
| Aristar Capital Management Gp, Llc |
10 percent owner |
1120 AVENUE OF THE AMERICAS, SUITE 1514, NEW YORK NY 10036 |
| Taylor Schreiber |
officer: Vice President of Research |
100 EUROPA DRIVE, CHAPEL HILL NC 27517 |
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