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.

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Equity Bottom-Up

We have increased our fair value estimate for Navitas by 8% to AUD 4.50 per share following the investor strategy day last week. Our fair value estimate implies a fiscal 2017 P/E ratio of 19 and a dividend yield of 4.2% or 5.6% including franking credits. At the current market price of AUD 4.40, we now consider the shares to be fairly valued. The increase in fair value is driven by a reduction in capital expenditure forecasts and a small increase in revenue forecasts.Navitas should continue to benefit from growth in the global tertiary education market but the company remains vulnerable to competitive threats due to a lack of an economic moat. Major competitors include Kaplan University, IntoUniversity, Study Group International, and Shorelight, in addition to the threat of in-sourcing by universities. The joint venture business model reduces the threat of competition to some degree but seven contracts expire this year and further contract losses are possible. However, university contracts typically don't go out to tender which influences our view that further contract losses are unlikely.Analyst: Gareth James

We have increased our fair value estimate for Navitas by 8% to AUD 4.50 per share following the investor strategy day last week. Our fair value estimate implies a fiscal 2017 P/E ratio of 19 and a dividend yield of 4.2% or 5.6% including franking credits. At the current market price of AUD 4.40, we now consider the shares to be fairly valued. The increase in fair value is driven by a reduction in capital expenditure forecasts and a small increase in revenue forecasts.Navitas should continue to benefit from growth in the global tertiary education market but the company remains vulnerable to competitive threats due to a lack of an economic moat. Major competitors include Kaplan University, IntoUniversity, Study Group International, and Shorelight, in addition to the threat of in-sourcing by universities. The joint venture business model reduces the threat of competition to some degree but seven contracts expire this year and further contract losses are possible. However, university contracts typically don't go out to tender which influences our view that further contract losses are unlikely.Analyst: Gareth James

Navitas' FVE Increased 8% Following Investor Strategy Day

Navitas Ltd

Navitas' FVE Increased 8% Following Investor Strategy Day