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

Thematic (Sector/Industry)

Democratic presidential candidates' potential drug policy reforms have pressured drug stocks, and ongoing political campaigns are likely to continue to create volatility despite the Republican-majority Congress and low probability of reforms passing into law.Among all the reforms, dual-eligible legislation—offering mandatory Medicaid-level drug rebates to some Medicare Part D beneficiaries— looks the most likely, and most impactful (5% earnings cut on average).Analysts: Karen Andersen, Damien Conover &amp; Kelsey Tsai

Democratic presidential candidates' potential drug policy reforms have pressured drug stocks, and ongoing political campaigns are likely to continue to create volatility despite the Republican-majority Congress and low probability of reforms passing into law.Among all the reforms, dual-eligible legislation—offering mandatory Medicaid-level drug rebates to some Medicare Part D beneficiaries— looks the most likely, and most impactful (5% earnings cut on average).Analysts: Karen Andersen, Damien Conover &amp; Kelsey Tsai

Low Odds of U.S. Drug Pricing Reforms Create Favorable Valuations

<ul><li class="p1">The median price/fair value in our biotech universe is 0.87, and in late September valuations fell to their cheapest levels since 2011.</li><li class="p1">While this is a far cry from the ratio of 0.73 we saw in August 2011 as the market rally was just beginning, we still think it offers a strong opportunity for investment in some of our favourite wide-moat names.</li><li class="p1">While barriers to entry appear to be relatively flat among our covered biotechs, as new products counter patent expirations and biosimilar entry, scores on other measures are increasing, as portfolios expand, productivity improves, and management focuses on therapeutic areas with better pricing power and more room for differentiation, like cancer and rare diseases.</li></ul>Analyst Team: Karen Andersen, CFA; Damien Conover, CFA; Alex Morozov, CFAFull report below the fold..

The median price/fair value in our biotech universe is 0.87, and in late September valuations fell to their cheapest levels since 2011.While this is a far cry from the ratio of 0.73 we saw in August 2011 as the market rally was just beginning, we still think it offers a strong opportunity for investment in some of our favourite wide-moat names.While barriers to entry appear to be relatively flat among our covered biotechs, as new products counter patent expirations and biosimilar entry, scores on other measures are increasing, as portfolios expand, productivity improves, and management focuses on therapeutic areas with better pricing power and more room for differentiation, like cancer and rare diseases.Analyst Team: Karen Andersen, CFA; Damien Conover, CFA; Alex Morozov, CFAFull report below the fold..

Morningstar Healthcare Observer: Biotech Industry Undervalued

Founder Evidente. Top rated quantitative analyst, Evidente

Sam Ferraro

Founder Evidente. Top rated quantitative analyst

Evidente

Evidente is an independent financial education firm that delivers innovative financial advice to wholesale investors, including active long only funds, hedge funds, pension funds, and sovereign wealth funds, in Australia and globally.  Drawing on academic research in asset pricing, behavioural finance and portfolio construction, Evidente provides wholesale investors with commercial solutions to stock selection and asset allocation decisions across equities and other asset classes.

<ul><li>Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.</li></ul><ul><li>In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.</li><li>Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.</li></ul>

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards businesses that they consider to be well managed.&nbsp; In the past decade, portfolio managers have also boasted of their ability to identify and invest in companies that score strongly across environment, governance and social (ESG) dimensions.In the second instalment of Evidente's Dissecting Quality series, I show that management quality and corporate governance matter more for complex companies, where shareholders face high monitoring costs. To that end, I develop a systematic model of complexity and agency costs for the ASX200 based on eight company specific factors.Some of the industrials that make up the top 20 complex stocks include: Qantas, Amcor, Computershare, Seek and Brambles. Investors can use the model to integrate their assessments of company management and corporate governance. In particular, investors should avoid complex stocks that score poorly across management quality and governance practices.

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Tokyo Electric Power (TEPCO) / Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/tokyo-electric-power-co-inc" target="_blank" data-smartkarma-citation="entities:15457:1" rel="noopener">Tokyo Electric Power (TEPCO) (9501 JP)</a> trade is to short or long-sell into exuberance. Shorts should wait until the pump exhausts itself (or appears to).</li>
<li>At 0.34x forward P/B, <a href="https://www.smartkarma.com/entities/swire-pacific-ltd-cl-a" target="_blank" data-smartkarma-citation="entities:10433:1" rel="noopener">Swire Pacific (19 HK)</a> is cheap. <a href="https://www.smartkarma.com/entities/swire-properties-ltd" target="_blank" data-smartkarma-citation="entities:5775:1" rel="noopener">Swire Properties (1972 HK)</a> at 0.33x is also inexpensive. But HK IP drags. Ger exposure to the stub.</li>
<li>Elliott sees <a href="https://www.smartkarma.com/entities/mitsui-o-s-k-lines-ltd" target="_blank" data-smartkarma-citation="entities:20717:1" rel="noopener">Mitsui O.S.K. Lines (9104 JP)</a> as undervalued. Best to be long than short on an outright basis, but there is not a lot of detail out there yet.</li>
</ul>


The Tokyo Electric Power (TEPCO) (9501 JP) trade is to short or long-sell into exuberance. Shorts should wait until the pump exhausts itself (or appears to).
At 0.34x forward P/B, Swire Pacific (19 HK) is cheap. Swire Properties (1972 HK) at 0.33x is also inexpensive. But HK IP drags. Ger exposure to the stub.
Elliott sees Mitsui O.S.K. Lines (9104 JP) as undervalued. Best to be long than short on an outright basis, but there is not a lot of detail out there yet.


Last Week In Event SPACE: TEPCO, Swire, Mitsui O.S.K. Lines. CK Hutchison

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of ASX Stocks as of Mar 13th (reported today). The aggregated short interest was USD37.9bn.</li>
<li>We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Insurance Australia, CSL, Transurban, James Hardie Industries, Evolution Mining.</li>
</ul>


We analyzed the changes in short interest of ASX Stocks as of Mar 13th (reported today). The aggregated short interest was USD37.9bn.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Insurance Australia, CSL, Transurban, James Hardie Industries, Evolution Mining.


ASX Short Interest Weekly (Mar 13th): Insurance Australia, CSL, Transurban, James Hardie Industries

Australia

Ramsay Health Care Ltd. provides health care services. The Company offers private hospital services, including, rehabilitation, psychiatric care, day, and complex surgery. Ramsay Health Care owns, operates, and manages health care facilities throughout Australia, Indonesia, and Europe.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Ramsay Health Care (RHC AU)

Low Odds of U.S. Drug Pricing Reforms Create Favorable Valuations

Democratic presidential candidates' potential drug policy reforms have pressured drug stocks, and ongoing political campaigns are likely to...

Morningstar, Inc.

Morningstar Healthcare Observer: Biotech Industry Undervalued

The median price/fair value in our biotech universe is 0.87, and in late September valuations fell to their cheapest levels since 2011. While this...

Morningstar, Inc.

Dissecting Quality: When Does Management Quality and Corporate Governance Matter Most?

Most active funds tout their ability to discriminate between good and poor quality management, and accordingly weight their portfolios towards...

Sam Ferraro

Last Week In Event SPACE: TEPCO, Swire, Mitsui O.S.K. Lines. CK Hutchison

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

ASX Short Interest Weekly (Mar 13th): Insurance Australia, CSL, Transurban, James Hardie Industries

We analyzed ASX short interest report for the past week and highlight short interest changes in Insurance Australia, CSL, Transurban, James Hardie...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)