Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Private Capital Markets

<div class="content-highlight"><h2>Profitability is in sight as we foresee <a href="https://www.smartkarma.com/entities/27999" target="_blank" data-smartkarma-citation="entities:27999:1">Pinterest Inc (PINS US)</a> taking a pinch out of the global digital advertising market.</h2></div><hr><p>In our view, Pinterest, an online product and idea discovery company that generates revenue by selling digital ads, has an intrinsic value of $15 billion, or $22 per share on a fully diluted basis. The firm is progressing toward an initial public offering by mid-April. After its last round of funding in June 2017, the firm's implied valuation was $12.3 billion, according to PitchBook. However, in its latest S-1 filing on April 8, Pinterest indicated an IPO price range of $15-$17; the $16 per share midpoint represents nearly an $11 billion market capitalization, below its last post-funding valuation. Assuming the IPO pricing remains in that range, we view Pinterest as an attractive investment opportunity.</p><p>We rate Pinterest as having a narrow economic moat and stable moat trend based on the network effect and intangible asset (data) moat sources, which we think can drive the company to profitability and excess returns on invested capital in the future. With more than 250 million average monthly users who access Pinterest with the intention of not only discovering ideas or products but also purchasing them immediately or in the future, we think the firm can attract more online ad dollars. In our view, Pinterest can attract various types of ad campaigns through the marketing funnel—from broad exposure or awareness to targeting and actual conversion. We think opportunities exist for the firm to gradually increase its share of the U.S. digital advertising market, after which, as its international users (mainly in Europe) increase, it will attract more ad dollars for that audience.</p><p>Pinterest is focused on carving out a piece of the global digital advertising space, which we value at a total addressable market of nearly $500 billion. While we don't expect Pinterest to displace online advertising behemoths <a href="https://www.smartkarma.com/entities/11369" target="_blank" data-smartkarma-citation="entities:11369:1">Alphabet Inc Cl C (GOOG US)</a> and <a href="https://www.smartkarma.com/entities/665" target="_blank" data-smartkarma-citation="entities:665:1">Facebook Inc A (FB US)</a> or up-and-coming <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a>, we do expect it to attract a small pinch of digital ad spending.</p><p>We expect impressive revenue growth at a 35% compound annual growth rate for Pinterest through 2023, likely to be driven by overall growth in digital advertising (which we estimate at a 12% CAGR) plus the firm adding more advertisers and the sale of more ad inventory as it is in its early growth stage. With strong top-line growth and Pinterest's network effect and data economic moat sources, we expect gross margin and operating margin expansion and foresee the firm becoming profitable in 2021, with the operating margin increasing to over 15% by 2023.</p><h2>Key Takeaways</h2><ul>
<li>We believe Pinterest warrants a narrow economic moat and stable moat trend rating. Indications of the network effect and intangible asset economic moat sources include Pinterest's strong (albeit decelerating) user growth and increase in average revenue generated per user through advertising.</li>
<li>While Pinterest will be competing with digital advertising behemoths like Google, Facebook, and more recently Amazon, we believe it can attract enough advertisers or ad dollars to become profitable and generate excess return on invested capital.</li>
<li>Pinterest's more innovative features such as Product Pins, Shop the Look, and visual search tool Lens have attracted retailers and direct-to-consumer brands to purchase ads on the platform and should continue to do so.</li>
<li>Pinterest's total addressable market is the global digital advertising market, valued at nearly $500 billion. We think that because pinners access the Pinterest app with the intention of not only discovering ideas or products but also purchasing them immediately or in the future, advertisers are willing to purchase ads from the firm.</li>
<li>We value Pinterest at $15 billion, higher than its latest filed IPO pricing range and its implied valuation of $12.3 billion in its last funding round.</li>
<li>On April 8, Pinterest indicated that it may price its shares between $15 and $17, the midpoint of which we estimate represents an $11 billion valuation, below its post-funding valuation. If the IPO pricing comes in below $17.60 per share or below a 0.80 price/fair value, we would view Pinterest shares as attractive.</li>
<li>We model strong ongoing revenue growth driven by growth in overall digital advertising plus the firm's advertisers and ad inventory. With strong top-line growth and Pinterest's economic moat sources creating operating leverage, we expect Pinterest to become profitable by 2021.</li>
</ul>

Profitability is in sight as we foresee Pinterest Inc (PINS US) taking a pinch out of the global digital advertising market.In our view, Pinterest, an online product and idea discovery company that generates revenue by selling digital ads, has an intrinsic value of $15 billion, or $22 per share on a fully diluted basis. The firm is progressing toward an initial public offering by mid-April. After its last round of funding in June 2017, the firm's implied valuation was $12.3 billion, according to PitchBook. However, in its latest S-1 filing on April 8, Pinterest indicated an IPO price range of $15-$17; the $16 per share midpoint represents nearly an $11 billion market capitalization, below its last post-funding valuation. Assuming the IPO pricing remains in that range, we view Pinterest as an attractive investment opportunity.We rate Pinterest as having a narrow economic moat and stable moat trend based on the network effect and intangible asset (data) moat sources, which we think can drive the company to profitability and excess returns on invested capital in the future. With more than 250 million average monthly users who access Pinterest with the intention of not only discovering ideas or products but also purchasing them immediately or in the future, we think the firm can attract more online ad dollars. In our view, Pinterest can attract various types of ad campaigns through the marketing funnel—from broad exposure or awareness to targeting and actual conversion. We think opportunities exist for the firm to gradually increase its share of the U.S. digital advertising market, after which, as its international users (mainly in Europe) increase, it will attract more ad dollars for that audience.Pinterest is focused on carving out a piece of the global digital advertising space, which we value at a total addressable market of nearly $500 billion. While we don't expect Pinterest to displace online advertising behemoths Alphabet Inc Cl C (GOOG US) and Facebook Inc A (FB US) or up-and-coming Amazon.com Inc (AMZN US), we do expect it to attract a small pinch of digital ad spending.We expect impressive revenue growth at a 35% compound annual growth rate for Pinterest through 2023, likely to be driven by overall growth in digital advertising (which we estimate at a 12% CAGR) plus the firm adding more advertisers and the sale of more ad inventory as it is in its early growth stage. With strong top-line growth and Pinterest's network effect and data economic moat sources, we expect gross margin and operating margin expansion and foresee the firm becoming profitable in 2021, with the operating margin increasing to over 15% by 2023.Key Takeaways
We believe Pinterest warrants a narrow economic moat and stable moat trend rating. Indications of the network effect and intangible asset economic moat sources include Pinterest's strong (albeit decelerating) user growth and increase in average revenue generated per user through advertising.
While Pinterest will be competing with digital advertising behemoths like Google, Facebook, and more recently Amazon, we believe it can attract enough advertisers or ad dollars to become profitable and generate excess return on invested capital.
Pinterest's more innovative features such as Product Pins, Shop the Look, and visual search tool Lens have attracted retailers and direct-to-consumer brands to purchase ads on the platform and should continue to do so.
Pinterest's total addressable market is the global digital advertising market, valued at nearly $500 billion. We think that because pinners access the Pinterest app with the intention of not only discovering ideas or products but also purchasing them immediately or in the future, advertisers are willing to purchase ads from the firm.
We value Pinterest at $15 billion, higher than its latest filed IPO pricing range and its implied valuation of $12.3 billion in its last funding round.
On April 8, Pinterest indicated that it may price its shares between $15 and $17, the midpoint of which we estimate represents an $11 billion valuation, below its post-funding valuation. If the IPO pricing comes in below $17.60 per share or below a 0.80 price/fair value, we would view Pinterest shares as attractive.
We model strong ongoing revenue growth driven by growth in overall digital advertising plus the firm's advertisers and ad inventory. With strong top-line growth and Pinterest's economic moat sources creating operating leverage, we expect Pinterest to become profitable by 2021.


Pinning a Narrow Moat Rating on the Pinterest Board

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>This week in StubWorld ...</p>
<ul>
<li>
<a href="https://www.smartkarma.com/entities/21085" target="_blank" data-smartkarma-citation="entities:21085:1">Naspers Ltd (NPN SJ)</a>'s discount to NAV narrows as it teases out more information on spinning-off and separately listing <a href="https://www.smartkarma.com/entities/26" target="_blank" data-smartkarma-citation="entities:26:1">Tencent Holdings (700 HK)</a>.</li>
</ul>
<p>Preceding my comments on Naspers are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>

This week in StubWorld ...


Naspers Ltd (NPN SJ)'s discount to NAV narrows as it teases out more information on spinning-off and separately listing Tencent Holdings (700 HK).

Preceding my comments on Naspers are the weekly setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.

Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<p>E-commerce is set to account for 15% of retail sales in 2025, double the size of any other channel, and become the biggest channel for physical merchandise by 2023.</p>
<p>However, recent research, which considers online sales in a store context, suggests that already in 2016-17, 35.3% of all retail sales were at least partly a result of online interactions through an omnichannel process.</p>
<p>By 2024, total EC sales including omnichannel transactions are expected to hit 44.6% of all retail sales or approximately ¥76.4 trillion.</p>

E-commerce is set to account for 15% of retail sales in 2025, double the size of any other channel, and become the biggest channel for physical merchandise by 2023.
However, recent research, which considers online sales in a store context, suggests that already in 2016-17, 35.3% of all retail sales were at least partly a result of online interactions through an omnichannel process.
By 2024, total EC sales including omnichannel transactions are expected to hit 44.6% of all retail sales or approximately ¥76.4 trillion.

Japan E-Commerce: Digital to Influence 45% of All Retail Sales by 2025

Equity analyst UK & Europe, UK Long Short

Peter Toeman

Equity analyst UK & Europe

Accelerating Tomorrow’s Independent Research

Boost Research

Boost Research Ltd is an appointed representative of Messels Ltd which is authorised and regulated by the FCA of the UK. 

This document is issued by Boost Research Limited solely for its clients. It may not be reproduced, redistributed or passed to any other person in whole or in part for any purpose without written consent of Boost Research. The material in this document is not intended for distribution or use outside the United Kingdom. This material is not directed at you if Boost Research is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you.

This document is provided for information purposes only and should not be regarded as an offer, solicitation, invitation, inducement or recommendation relating to the subscription, purchase or sale of any security or other financial instrument.  This document does not constitute, and should not be interpreted as, investment advice.  It is accordingly recommended that you should seek independent advice from a suitably qualified professional advisor before taking any decisions in relation to the investments detailed herein. All expressions of opinions and estimates constitute a judgement and, unless otherwise stated, are those of the author and the research department of Boost Research only, and are subject to change without notice. Boost Research is under no obligation to update the information contained herein. Whilst Boost Research has taken all reasonable care to ensure that the information contained in this document is not untrue or misleading at the time of publication, Boost Research cannot guarantee its accuracy or completeness, and you should not act on it without first independently verifying its contents. This document is not guaranteed to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty either expressed or implied is made, nor responsibility of any kind is accepted, by Boost Research or any of its respective directors, officers, employees or analysts either as to the accuracy or completeness of any information contained in this document nor should it be relied on as such. No liability whatsoever is accepted by Boost Research or any of its respective directors, officers, employees or analysts for any loss, whether direct or consequential, arising whether directly or indirectly as a result of the recipient acting on the content of this document, including, without limitation, lost profits arising from the use of this document or any of its contents.

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<p><strong>With just two weeks left before the UK is set to leave the EU, the shape of the arrangements with country's largest trading partners is still to be decided. Imminent political developments will determine whether Brexit is hard, soft, deferred, or aborted</strong>.</p>
<p><strong>The UK's principal share index the FTSE 100 is virtually unchanged since we established our Long/Short portfolio a month ago. Results from Lloyds and Centrica have lead to useful outperformance and underperformance respectively. The M&amp;S joint venture with Ocado is judged by investors to have added a lot more value to the latter than the former. We have been wrong-footed by Melrose Industries, but heck, there is always one.</strong></p>
<p><strong>Remembering that no one ever got poor from taking  profits,  we have closed out our long position in Lloyds Banking.  </strong></p>
<div class="content-caption">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/081/949/original/Capture%201.PNG?1552520300" class="editor-image img-responsive" data-smartkarma-image-id="81949"></figure>
<div class="content-caption">S&amp;P Capital IQ</div>
</div>

With just two weeks left before the UK is set to leave the EU, the shape of the arrangements with country's largest trading partners is still to be decided. Imminent political developments will determine whether Brexit is hard, soft, deferred, or aborted.
The UK's principal share index the FTSE 100 is virtually unchanged since we established our Long/Short portfolio a month ago. Results from Lloyds and Centrica have lead to useful outperformance and underperformance respectively. The M&amp;S joint venture with Ocado is judged by investors to have added a lot more value to the latter than the former. We have been wrong-footed by Melrose Industries, but heck, there is always one.
Remembering that no one ever got poor from taking  profits,  we have closed out our long position in Lloyds Banking.  


S&amp;P Capital IQ


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology.  In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology - our favorite.</p>

The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time has repeatedly suggested that a retest may not occur. We continue to believe the market remains healthy with overall and leadership remaining centered in the cyclical Sectors, mainly Technology.  In this publication we provide an overview of our U.S. equity strategy, and examine attractive opportunities in each of our 12 Sectors, beginning with Technology - our favorite.

U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector

United States

Amazon.com, Inc. is an online retailer that offers a wide range of products. The Company's products include books, music, videotapes, computers, electronics, home and garden, and numerous other products.  Amazon offers personalized shopping services, Web-based credit card payment, and direct shipping to customers.

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Amazon (AMZN US)

Pinning a Narrow Moat Rating on the Pinterest Board

Profitability is in sight as we foresee Pinterest Inc (PINS US) taking a pinch out of the global digital advertising market.In our view, Pinterest,...

Morningstar, Inc.

StubWorld: Naspers' Restructuring Update

This week in StubWorld ... Naspers Ltd (NPN SJ)'s discount to NAV narrows as it teases out more information on spinning-off and separately...

David Blennerhassett

Japan E-Commerce: Digital to Influence 45% of All Retail Sales by 2025

E-commerce is set to account for 15% of retail sales in 2025, double the size of any other channel, and become the biggest channel for physical...

Michael Causton

FTSE 100 Long/Short: Beginner's Luck

With just two weeks left before the UK is set to leave the EU, the shape of the arrangements with country's largest trading partners is still to be...

Boost Research

U.S. Equity Strategy: Positive Outlook Intact; Cyclicals Leading; Opportunities in Tech Sector

The market’s bounce off of the December, 2018 low was a swift “V” reversal. While we often see a retest of such events, our outlook since that time...

Vermilion Research

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