JM Smucker Co (JM Smucker Co) Predictability Rank

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What is JM Smucker Co 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.

JM Smucker Co 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

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JM Smucker Co (JM Smucker Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » JM Smucker Co (NYSE:SJM) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

JM2:Germany S1JM34:Brazil

Address

One Strawberry Lane, Orrville, OH, USA, 44667-0280

Website

https://www.jmsmucker.com

J.M. Smucker is a packaged food company that primarily sells through the U.S. retail channel (77% of forecast fiscal 2024 revenue), with the remaining share consisting of Hostess, foodservice, and international (primarily Canada). Following the divestiture of several pet foods brands and private-label products that constituted about $1.5 billion of sales, retail coffee is now its largest category (33% of sales) with brands Folgers and Dunkin'. Pet foods (22% of sales) holds leading brands like Milk-Bone and Meow Mix. Of its remaining, approximately 22% comes from consumer foods, primarily peanut butter and jelly, through brands Jif and Smucker's. The company acquired Hostess Brands in fiscal 2024 to boost its snack and convenience store presence.

Executives

Tucker H Marshall	officer: Chief Financial Officer	ONE STRAWBERRY LANE, ORRVILLE OH 44667
Tarang Amin	director	C/O SCHIFF NUTRITION INTERNATIONAL, INC., 2002 SOUTH 5070 WEST, SALT LAKE CITY UT 84104
Amy C Held	officer: Chief Strategy & Int'l Officer	ONE STRAWBERRY LANE, ORRVILLE OH 44667
Mercedes Abramo	director	ONE STRAWBERRY LANE, ORRVILLE OH 44667
Richard K Smucker	director, officer: President	C/ WM WRIGLEY JR CO, 410 N MICHIGAN AVE, CHICAGO IL 60611
Mark T Smucker	officer: Vice President
Jill R Penrose	officer: Chief People & Admin Officer	ONE STRAWBERRY LANE, ORRVILLE OH 44667
John P Brase	officer: Chief Operating Officer	ONE STRAWBERRY LANE, ORRVILLE OH 44667
Jeannette L Knudsen	officer: Chief Legal & Compliance Offic	ONE STRAWBERRY LANE, ORRVILLE OH 44667
Geoff E Tanner	officer: Chief Marketing & Commercial	ONE STRAWBERRY LANE, ORRVILLE OH 44667
Johnson Jonathan E Iii	director	6322 S 300 S, STE 100, SALT LAKE CITY UT 84121
Nancy Lopez Knight	director	2308 TARA DRIVE, ALBANY GA 31721
Jay L Henderson	director	50 SOUTH LASALLE ST, CHICAGO IL 60603
Dawn C Willoughby	director	1221 BROADWAY, OAKLAND CA 94612
Sandra Pianalto	director	1000 EATON BOULEVARD, CLEVELAND OH 44122