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

Equity Bottom-Up

No-moat Origin Energy plans to divest its conventional upstream gas business via an IPO in 2017 to help reduce its heavy debt load (AUD 9.1 billion in fiscal 2016) and capital expenditure requirements. Financial details will be disclosed at a later date, but we believe proceeds could be more than AUD 1.5 billion. Management expects the sale to be EPS-accretive from fiscal 2019 as interest expense savings offset lost earnings. We make no changes to our forecasts at this stage. We maintain our AUD 5.00 fair valueWe make no changes to our forecasts at this stage. We maintain our AUD 5.00 fair value estimate and consider Origin to be overvalued, with shares currently trading 33% above our valuation. Risk remains high despite progress on repairing the balance sheet.Analyst: Adrian Atkins

No-moat Origin Energy plans to divest its conventional upstream gas business via an IPO in 2017 to help reduce its heavy debt load (AUD 9.1 billion in fiscal 2016) and capital expenditure requirements. Financial details will be disclosed at a later date, but we believe proceeds could be more than AUD 1.5 billion. Management expects the sale to be EPS-accretive from fiscal 2019 as interest expense savings offset lost earnings. We make no changes to our forecasts at this stage. We maintain our AUD 5.00 fair valueWe make no changes to our forecasts at this stage. We maintain our AUD 5.00 fair value estimate and consider Origin to be overvalued, with shares currently trading 33% above our valuation. Risk remains high despite progress on repairing the balance sheet.Analyst: Adrian Atkins

Origin to IPO Conventional Gas Fields to Accelerate Debt Reduction

Thematic (Sector/Industry)

OPEC's production cuts announced this week represent a positive near-term development for world oil markets, removing more than 1 million barrels per day from an oversupplied system. Even after factoring in the inevitable U.S. shale response to higher crude prices, OPEC's cuts point to a meaningful supply deficit next year. Consequently, we are raising our 2017 West Texas Intermediate price to $60 per barrel from $50.Improved near-term fundamentals come at a cost, however. Even a modest recovery in oil prices will encourage U.S. shale producers to further ramp activity so that they eventually replace almost all "removed" OPEC barrels with their own. Increased near-term shale activity means that oil prices are unlikely to remain elevated for long. The industry is awash in low-cost oil, and temporary OPEC cuts cannot alter this reality. Our long-term oil price assumption of $55/bbl WTI is unchanged.Analyst: Stephen Simko, CFA

OPEC's production cuts announced this week represent a positive near-term development for world oil markets, removing more than 1 million barrels per day from an oversupplied system. Even after factoring in the inevitable U.S. shale response to higher crude prices, OPEC's cuts point to a meaningful supply deficit next year. Consequently, we are raising our 2017 West Texas Intermediate price to $60 per barrel from $50.Improved near-term fundamentals come at a cost, however. Even a modest recovery in oil prices will encourage U.S. shale producers to further ramp activity so that they eventually replace almost all "removed" OPEC barrels with their own. Increased near-term shale activity means that oil prices are unlikely to remain elevated for long. The industry is awash in low-cost oil, and temporary OPEC cuts cannot alter this reality. Our long-term oil price assumption of $55/bbl WTI is unchanged.Analyst: Stephen Simko, CFA 

OPEC Adds a Twist to the Plot, but the Ending Is Unchanged

The decision by OPEC to cut production is certain to have a material impact on short-term oil and energy share prices.This brief report aims to address what we believe are the key supply aspects underpinning 2017-18 fundamentals. Our aim is to assist long-term investors with making sense of the implications of whatever supply strategy OPEC ultimately decides to pursue. Whatever strategy is decided upon, the short-term nature of any production cuts and the long-term problem for oil prices that is U.S. shale means our bearish $55/barrel West Texas Intermediate, or WTI, long-term price outlook will not be changing.Analyst: Stephen Simko, CFA

The decision by OPEC to cut production is certain to have a material impact on short-term oil and energy share prices.This brief report aims to address what we believe are the key supply aspects underpinning 2017-18 fundamentals. Our aim is to assist long-term investors with making sense of the implications of whatever supply strategy OPEC ultimately decides to pursue. Whatever strategy is decided upon, the short-term nature of any production cuts and the long-term problem for oil prices that is U.S. shale means our bearish $55/barrel West Texas Intermediate, or WTI, long-term price outlook will not be changing.Analyst: Stephen Simko, CFA 

Cold Water: An OPEC Cut Can't Fix Oil's Structural Issues

Director - Research, Consulting and Advisory, BondAdviser

Nicholas Yaxley

Director - Research, Consulting and Advisory

Australian bonds & fixed income research

BondAdviser

BondAdviser is the central reference point for intelligent information on Australian fixed income markets. We help you make informed decisions by providing unbiased research, transparent pricing data, analytics, portfolio tools and education.

BondAdviser has the broadest coverage of retail-accessible ASX-listed and over-the-counter Australian bonds and fixed income securities. We make it easy for you to review and compare investments before you place an order with your broker or dealer.

Credit

Back in February 2016, trading margins of ASX-listed hybrid securities widened significantly. As a result, there were a number of attractive investment opportunities and following a relatively stable reporting season and shift in sentiment, margins began to retrace. While on the surface it appears margins are still tracking well relative to February, a more suitable performance measure would be to calculate the cumulative change to see if investors have recovered the losses endured at start of…

Back in February 2016, trading margins of ASX-listed hybrid securities widened significantly. As a result, there were a number of attractive investment opportunities and following a relatively stable reporting season and shift in sentiment, margins began to retrace. While on the surface it appears margins are still tracking well relative to February, a more suitable performance measure would be to calculate the cumulative change to see if investors have recovered the losses endured at start of…

Hybrids: Have We Recovered Since February?

EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

This piece highlights my recent proposal for a mechanism to solve the enforceability and adaptability issues faced by OPEC in their proposed production cuts and provides some worked examples of how the Tactical Petroleum Fund would work in practice for Smartkarma readers.

This piece highlights my recent proposal for a mechanism to solve the enforceability and adaptability issues faced by OPEC in their proposed production cuts and provides some worked examples of how the Tactical Petroleum Fund would work in practice for Smartkarma readers.

Australia

Washington H. Soul Pattinson & Company Limited is an investment holding company. The Company owns shares and properties, coal mining, bulk handling, commercial television licensee, telecommunications carrier, merchant banking, funds management, pharmaceutical retailing, manufacture, processing and marketing of biscuits and cakes.

Washington H. Soul Pattinson and Co. Ltd (SOL AU)

Santos Limited explores for and produces natural gas, crude oil, condensate, naphtha and liquid petroleum gas.  The Company conducts major onshore and offshore petroleum exploration activities at oil and gas fields in Australia (Cooper/Eromanga Basins), the United States (Gulf of Mexico), Indonesia and Papua New Guinea. The Company also transports crude oil by pipeline.

Whitehaven Coal Limited mines and sells metallurgical and thermal coals to the global steel, power generation, and metallurgical industries.

New Hope Corporation Limited is a thermal coal production company based in Australia. The Company also has interests in logistics and infrastructure operations in Australia as well.

Viva Energy Group Limited markets petroleum products. The Company focuses on making, importing, and delivering the fuels, lubricants, chemicals, and bitumen. Viva Energy Group serves the mining, aviation, and marine industries in Australia.

Beach Energy Limited explores for, develops, and produces oil and natural gas. The Company holds interests in exploration and production tenements in Australia, USA, Egypt, Tanzania and Papua New Guinea.

Paladin Energy Ltd operates as a mining company. The Company explores and mines uranium. Paladin Energy serves customers worldwide.

Stanmore Coal Ltd. explores for coal in Australia. The Company's interests include a portfolio of coal assets within Queensland's Bowen and Surat Basin coal provinces.

Emerald Resources NL is an oil and gas exploration company with exploration activities in the United States and Australia.

Karoon Energy Ltd operates as an exploration company. The Company explores and acquires oil and gas exploration assets. Karoon Energy serves customers worldwide.

Idemitsu Kosan Co., Ltd. explores, imports, refines, and distributes petroleum and its related products.  The Company also manufactures and sells petrochemical products.

PTT Exploration and Production Public Company Limited explores for crude oil and natural gas, develops fields for production, and produces oil and natural gas. The Company is a subsidiary of the Petroleum Authority of Thailand.

China Petroleum & Chemical Corporation produces and trades petroleum and petrochemical products. The Company offers gasoline, diesel, jet fuel, kerosene, ethylene, synthetic fibers, synthetic rubber, synthetic resins, and chemical fertilizers. China Petroleum & Chemical markets its products throughout China.

ENEOS Holdings, Inc. operates refining and marketing businesses. The Company refines and distributes petroleum and petroleum chemical products. ENEOS Holdings also provides non ferrous metals, electronic materials, and other products.

APA Corporation operates as an oil and gas company. The Company focuses on exploration and production of oil and gas properties. APA serves clients worldwide.

Marathon Oil Corporation is an independent international energy company engaged in exploration and production, oil sands mining and integrated gas. The Company's operations are focused in North America, Africa and Europe.

EQT Corporation is an integrated energy company with emphasis on Appalachian area natural-gas supply, transmission and distribution. The Company, through its subsidiaries, offer natural gas products to wholesale and retail customers.

Kunlun Energy Company Ltd, through its subsidiaries, explores and produces crude oil and natural gas in China.

Bharat Petroleum Corporation Limited explores for and refines crude oil. The Company manufactures petroleum, petroleum products, lubricants, liquefied petroleum gas, aromatics like benzene and toluene, and other related products. Bharat has retail outlets throughout the country.

Antero Resources Corporation explores, develops, and produces oil and natural gas. The Company focuses on the acquisition, development, and production of unconventional oil and liquids-rich natural gas properties. Antero Resources serves customers in the United States.

Origin Energy Limited is an integrated energy company. The Company is an energy retailer in Australia across electricity, gas and LPG. Origin Energy also holds a generation portfolio and fuel position and a renewable energy portfolio, as well as unconventional gas and LNG interests.

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Origin Energy (ORG AU)

Origin to IPO Conventional Gas Fields to Accelerate Debt Reduction

No-moat Origin Energy plans to divest its conventional upstream gas business via an IPO in 2017 to help reduce its heavy debt load (AUD 9.1 billion...

Morningstar, Inc.

OPEC Adds a Twist to the Plot, but the Ending Is Unchanged

OPEC's production cuts announced this week represent a positive near-term development for world oil markets, removing more than 1 million barrels...

Morningstar, Inc.

Cold Water: An OPEC Cut Can't Fix Oil's Structural Issues

The decision by OPEC to cut production is certain to have a material impact on short-term oil and energy share prices.This brief report aims to...

Morningstar, Inc.

Hybrids: Have We Recovered Since February?

Back in February 2016, trading margins of ASX-listed hybrid securities widened significantly. As a result, there were a number of attractive...

BondAdviser

How to Fix Oil Prices

This piece highlights my recent proposal for a mechanism to solve the enforceability and adaptability issues faced by OPEC in their proposed...

Emad Mostaque

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52-week Range

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