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Education Realty Trust (Education Realty Trust) Predictability Rank


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What is Education Realty Trust Predictability Rank?

Not Rated

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.

Education Realty Trust 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

PredictablesNon-PredictableAll stocks
Total Number of stocks57018332403
Total Lost Money61830891
Total Lost More Than 50%18412430
Total Lost More Than 90%48690
Average Gain260.6%100.0%138.1%
Median Gain150.0%13.0%39.0%
Maximum Gain2852.0%11483.0%11483.0%
Maximum Loss-100.0%-100.0%-100.0%
Annualized Average Gain12.7%6.7%8.4%
Annualized Median Gain8.9%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 Rank5-Star4.5-Star4-Star3.5-Star3-Star2.5-Star2-Star1-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

Education Realty Trust Predictability Rank Related Terms

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Education Realty Trust (Education Realty Trust) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Education Realty Trust Inc (NYSE:EDR) » Definitions » Predictability Rank
Comparable Companies
XBRU:AED XPAR:ALTA TSE:3269 TSE:3282 TSX:BEI.UN TSE:3278 TSE:8986 TSX:NVU.UN TSX:IIP.UN TSX:KMP.UN IRT NXRT IST:EKGYO IRET ASX:INA XBRU:CPINV TSE:3459 SNR RESI APTS
Traded in Other Exchanges
N/A
Address
Website
http://www.EDRTrust.com
Education Realty Trust Inc is a real estate investment trust engaged in the acquisition, development, and management of collegiate housing communities located near university campuses throughout the United States. In terms of the total number of residential communities and the total number of beds, the majority of the company's real estate portfolio is located in the Mid-Atlantic and South Central regions of the United States. Nearly all of Education Realty's revenue is derived from short-term collegiate housing leases. Most of this revenue is generated by the company's holdings in the Mid-Atlantic and South Central regions. Real estate markets surrounding universities in Kentucky and Texas represent some of Education Realty's largest individual markets.
Executives
John T Thomas director 309 N. WATER STREET, SUITE 500, MILWAUKEE WI 53202
Brewer Edwin B Jr officer: Executive VP and CFO C/O EDUCATION REALTY TRUST, INC., 999 SOUTH SHADY GROVE ROAD, SUITE 600, MEMPHIS TN 38120
Howard A Silver director 999 SOUTH SHADY GROVE ROAD, SUITE 600, MEMPHIS TN 38120
Randy L Churchey director, officer: Chairman and CEO 999 SOUTH SHADY GROVE ROAD, SUITE 600, MEMPHIS TN 38120
John V Arabia director 200 SPECTRUM CENTER DRIVE, SUITE 2100, IRVINE CA 92618
Kimberly Schaefer director C/O SEAWORLD ENTERTAINMENT, INC., 6240 SEA HARBOR DR, ORLANDO FL 32821
Randall H Brown officer: Exec. VP, CFO and Treasurer 2100 REXFORD ROAD, SUITE 414, CHARLOTTE NC 28211