Invesco Mortgage Capital (Invesco Mortgage Capital) Predictability Rank

View and export this data going back to 2009. Start your Free Trial

What is Invesco Mortgage Capital 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.

Invesco Mortgage Capital 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

Invesco Mortgage Capital Predictability Rank Related Terms

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

Invesco Mortgage Capital (Invesco Mortgage Capital) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Invesco Mortgage Capital Inc (NYSE:IVR) » Definitions » Predictability Rank

Comparable Companies

ORC TRTX GPMT ACRE REFI NREF AOMR SEVN MITT SACH NLY STWD AGNC RITM BXMT ABR CMTG RC ARI LADR

Traded in Other Exchanges

IVRpC.PFD:USA IVRpB.PFD:USA 7M20:Germany 7M20:Germany

Address

1555 Peachtree Street, N.E., Suite 1800, Two Peachtree Pointe, Atlanta, GA, USA, 30309

Website

https://www.invescomortgagecapital.com

Invesco Mortgage Capital Inc is a REIT that invests, finances, and manages residential and commercial mortgage-backed securities and mortgage loans. The company's portfolio consists of residential mortgage-backed securities (RMBS) that are guaranteed by a U.S. government agency such as the Government National Mortgage Association, or a federally chartered corporation such as the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; Commercial mortgage-backed securities (CMBS) that are not guaranteed by a U.S. government agency or a federally chartered corporation; RMBS that are not guaranteed by a U.S. government agency or a federally chartered corporation; and other real estate-related financing arrangements.

Executives

Carolyn L Gibbs	director	1331 SPRING ST. NW, SUITE 2500, ATLANTA GA 30309
Katharine Kelley	director	1555 PEACHTREE ST. NE, SUITE 1800, ATLANTA GA 30309
Lientz James R Jr	director	GEORGIA POSER CO BIN 10240, 241 RALPH MCGILL BLVD, ATLANTA GA 30308
John Anzalone	officer: Chief Investment Officer	INVESCO LTD., 1555 PEACHTREE STREET NE, ATLANTA GA 30309
Kevin M Collins	officer: Executive Vice President	1555 PEACHTREE STREET NE, SUITE 1800, ATLANTA GA 30309
Phegley Richard Lee Jr.	officer: Chief Financial Officer	1331 SPRING STREET NW, SUITE 2500, ATLANTA GA 30309
Don H Liu	director	1000 NICOLLET MALL, TPS-3155, MINNEAPOLIS MN 55403
Beth Zayicek	director	1555 PEACHTREE ST. NE, SUITE 1800, ATLANTA GA 30309
David B Lyle	officer: Executive Vice President	1555 PEACHTREE ST. NE, SUITE 1800, ATLANTA GA 30309
John Day	director	1520 OLD TROLLEY ROAD, SUMMERVILLE SC 29485
Dennis P Lockhart	director	100 GOLF ROAD, GOLF IL 60029
Brian Norris	officer: Interim CIO	1555 PEACHTREE STREET, NE, SUITE 1800, ATLANTA GA 30309
Edward J Hardin	director	5430 LBJ FREEWAY, SUIT 1700, DALLAS TX 75240
Mario Clemente	other: Officer of Manager	1555 PEACHTREE STREET, NE, SUITE 1800, ATLANTA GA 30309
Loren M Starr	director