First Hawaiian (First Hawaiian) Predictability Rank

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What is First Hawaiian 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.

First Hawaiian 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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First Hawaiian (First Hawaiian) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Banks » First Hawaiian Inc (NAS:FHB) » Definitions » Predictability Rank

Comparable Companies

Traded in Other Exchanges

N/A

Address

999 Bishop Street, 29th Floor, Honolulu, HI, USA, 96813

Website

https://www.fhb.com

First Hawaiian Inc is a bank holding company. It provides a diversified range of banking services to consumer and commercial customers, including deposit products, lending services, and wealth management and trust services. The company offers a variety of deposit products to its customers, including checking and savings accounts and other types of deposit accounts. It provides commercial and industrial lending, including auto dealer flooring, commercial real estate and construction lending. It also offers comprehensive consumer lending services focused on residential real estate lending, indirect auto financing and other consumer loans. Its segments are Retail Banking, Commercial Banking and Treasury and Other of which key revenue is derived from Retail Banking.

Executives

Christopher L Dods	officer: Vice Ch & Chief Operating Ofcr	352 WAILUPE CIRCLE, HONOLULU HI 96821
Darlene N. Blakeney	officer: EVP & CHIEF LENDING OFFICER	44-656 B KANEOHE BAY DRIVE, KANEOHE HI 96744
Lea M. Nakamura	officer: EVP & CHIEF RISK OFFICER	99-667 POHUE STREET, AIEA HI 96701
Robert S Harrison	director, officer: Chairman of the Board and CEO	999 BISHOP STREET, HONOLULU HI 96813
James M Moses	officer: VICE CH & CHIEF FINANCIAL OFCR	999 BISHOP STREET, HONOLULU HI 96813
Mark M Mugiishi	director	1177 QUEEN STREET PH2, HONOLULU HI 96814
Michael K Fujimoto	director	16-166 MELEKAHIWA STREET, KEAAU HI 96749-8016
Ravi Mallela	officer: Exec VP, CFO & Treasurer	C/O NMI HOLDINGS, INC. (NATIONAL MI), 2100 POWELL ST., 12TH FLOOR, EMERYVILLE CA 94608
Jim Moffatt	director	1423 GARFIELD AVE., SOUTH PASADENA CA 91030
Kelly Ann Thompson	director	921 LINCOLN PL, PACIFICA CA 94044
Neill Char	officer: Executive VP	266 PUIWA ROAD, HONOLULU HI 96817
Vanessa L Washington	director	CATELLUS DEVELOPEMENT CORP, 201 MISSION STREET 2ND FL, SAN FRANCISCO CA 94105-1832
Mitchell Nishimoto	officer: Exec VP & Manager	2121 KEEAUMOKU STREET, HONOLULU HI 96822
Paribas Bnp	director, 10 percent owner	3 RUE D'ANTIN, PARIS I0 75002
Craig Scott Wo	director	702 SOUTH BERETANIA STREET, HONOLULU HI 96813