Charter Communications (Charter Communications) Predictability Rank

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What is Charter Communications 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.

Charter Communications 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

Charter Communications Predictability Rank Related Terms

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Charter Communications (Charter Communications) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Telecommunication Services » Charter Communications Inc (NAS:CHTR) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

CHTR:Mexico 1CHTR:Italy CQD:Germany CQD:Germany CHCM34:Brazil CHTR:Austria

Address

400 Washington Boulevard, Stamford, CT, USA, 06902

Website

https://corporate.charter.com

Charter is the product of the 2016 merger of three cable companies, each with a decades-long history in the business: Legacy Charter, Time Warner Cable, and Bright House Networks. The firm now holds networks capable of providing television, internet access, and phone services to roughly 56 million U.S. homes and businesses, around 40% of the country. Across this footprint, Charter serves 30 million residential and 2 million commercial customer accounts under the Spectrum brand, making it the second-largest U.S. cable company behind Comcast. The firm also owns, in whole or in part, sports and news networks, including Spectrum SportsNet (long-term local rights to Los Angeles Lakers games), SportsNet LA (Los Angeles Dodgers), SportsNet New York (New York Mets), and Spectrum News NY1.

Executives

Thomas Rutledge	director, officer: President and CEO	400 WASHINGTON BLVD., STAMFORD CT 06902
Jamal H Haughton	officer: EVP/Gen Counsel/Corp Secretary	TWO PENNSYLVANIA PLAZA, NEW YORK NY 10121
Gregory B Maffei	director	12300 LIBERTY BLVD, ENGLEWOOD CO 80112
Craig A Jacobson	director	C/O EXPEDIA, INC., 333 108TH AVENUE NE, BELLEVUE WA 98004
Richard Adam Ray	officer: EVP, Chief Commercial Officer	400 WASHINGTON BLVD, STAMFORD CT 06902
Steven A Miron	director	DISCOVERY COMMUNICATIONS, INC., 1 DISCOVERY PLACE, SILVER SPRING MD 20910
Eric Louis Zinterhofer	director	C/O SEARCHLIGHT CAPITAL PARTNERS GP, LP, 745 FIFTH AVENUE, 27TH FLOOR, NEW YORK NY 10151
Jonathan Hargis	officer: EVP/Chief Marketing Officer	400 WASHINGTON BLVD., STAMFORD CT 06902
Jessica M Fischer	officer: Chief Financial Officer	400 WASHINGTON BLVD., STAMFORD CT 06902
John Bickham	officer: EVP/Chief Operating Officer	12405 POWERSCOURT DRIVE, ST. LOUIS MO 63131
Richard R Dykhouse	officer: SVP/Gen Counsel/Corp Secretary	12405 POWERSCOURT DRIVE, ST. LOUIS MO 63131
David C Merritt	director	CHARTER COMMUNICATIONS INC, 12405 POWERSCOURT DRIVE, ST LOUIS MO 63131
David Ellen	officer: Senior Executive VicePresident	1111 STEWART AVENUE, BETHPAGE NY 11714
Balan Nair	director	901 EXPLORER BOULEVARD, HUNTSVILLE AL 35806
Christopher L Winfrey	officer: EVP/Chief Financial Officer	CHARTER COMMUNICATIONS, INC., 12405 POWERSCOURT DRIVE, ST. LOUIS MO 63131