Verra Mobility (Verra Mobility) Predictability Rank

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What is Verra Mobility 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.

Verra Mobility 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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Verra Mobility (Verra Mobility) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Verra Mobility Corp (NAS:VRRM) » Definitions » Predictability Rank

Traded in Other Exchanges

0YK:Germany

Address

1150 North Alma School Road, Mesa, AZ, USA, 85201

Website

https://www.verramobility.com

Verra Mobility Corp provides smart transportation solutions. The company develops and uses technology and data intelligence to help make transportation safer and easier. It operates in three segments namely Commercial Services, Government Solutions, and Parking Solutions. It generates maximum revenue from the Commercial Services segment. The commercial Services segment delivers tolling and violation management services to rental car companies, commercial fleet vehicle owners, and violation issuing authorities.

Executives

Craig C Conti	officer: EVP	1 S. WACKER DR., SUITE 1000, CHICAGO IL 60606
Steve Lalla	officer: EVP Commercial Services	C/O VERTIV HOLDINGS CO, 1050 DEARBORN DRIVE, COLUMBUS OH 43085
David Martin Roberts	director, officer: President and CEO	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Jonathan Keyser	other: Chief Legal Officer	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Jonathan Baldwin	officer: EVP-Government Solutions	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Sarah E Farrell	director	572 RUGER STREET, SUITE B, SAN FRANCISCO CA 94129
Platinum Equity Llc	director, 10 percent owner	360 NORTH CRESCENT DRIVE, BEVERLY HILLS CA 90210
Blake Norman P Iii	officer: Pres. T2 Systems	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Patricia Chiodo	officer: Chief Financial Officer	5227 EAST GLORIA LANE, CAVE CREEK AZ 85331
Rebecca Collins	officer: General Counsel	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Mark J. Talbot	officer: EVP Government Solutions	1150 NORTH ALMA SCHOOL ROAD, MESA AZ 85201
Michael P Huerta	director	1800 M STREET NW SUITE 800, WASHINGTON DC 20036
Patrick J Byrne	director	395 PAGE MILL ROAD, MS A3-18, PALO ALTO CA 94306
Garrett Fristoe Miller	officer: Executive Vice President	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201
Vincent Brigidi	officer: Exec. VP	1150 N. ALMA SCHOOL ROAD, MESA AZ 85201