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

No-moat, 4-star-rated Fiat Chrysler's stock has 55% upside to our EUR 20 fair value estimate from its current trading level.Since the markets began to sell off on China concerns in July, Fiat Chrysler's shares have been beaten down nearly 15%. We think the stock has been overly punished as the market myopically focuses on high debt leverage, cash needed for aggressive expansion, and press coverage of CEO Sergio Marchionne's pursuit of "cataclysmic" industry change.Slower China automobile demand growth will have insufficient impact on Fiat Chrysler to warrant a change in our EUR 20 fair value estimate. Out of a global total of 4.6 million vehicles shipped last year, Fiat Chrysler delivered 182,000 in China.Granted, some were high-profit units from Ferrari and even more so from Maserati. However, Fiat Chrysler has been late to the mainstream, high-volume China market. Jeep models should start penetrating the market in a more meaningful way later next year. Healthy demand in North America and a nascent but solid recovery in Europe enable at least partial offsets to a drop in Brazilian demand and weaker growth in China.In our opinion, the market does not have a full grasp of the potential profitability and returns that can be generated by the complete integration of Fiat Chrysler.Neither does the market fully appreciate the value of the underlying assets of Fiat Chrysler.We expect the Ferrari separation to be completed in the first quarter of 2016, unlocking an undervalued asset for shareholders.With a 4-star rating and the stock currently trading at a 35% discount to our EUR 20 fair value estimate, we think investors can own Ferrari through Fiat Chrysler at a compelling valuation.Analyst: Richard J. HilgertFull Report below the fold....

No-moat, 4-star-rated Fiat Chrysler's stock has 55% upside to our EUR 20 fair value estimate from its current trading level.Since the markets began to sell off on China concerns in July, Fiat Chrysler's shares have been beaten down nearly 15%. We think the stock has been overly punished as the market myopically focuses on high debt leverage, cash needed for aggressive expansion, and press coverage of CEO Sergio Marchionne's pursuit of "cataclysmic" industry change.Slower China automobile demand growth will have insufficient impact on Fiat Chrysler to warrant a change in our EUR 20 fair value estimate. Out of a global total of 4.6 million vehicles shipped last year, Fiat Chrysler delivered 182,000 in China.Granted, some were high-profit units from Ferrari and even more so from Maserati. However, Fiat Chrysler has been late to the mainstream, high-volume China market. Jeep models should start penetrating the market in a more meaningful way later next year. Healthy demand in North America and a nascent but solid recovery in Europe enable at least partial offsets to a drop in Brazilian demand and weaker growth in China.In our opinion, the market does not have a full grasp of the potential profitability and returns that can be generated by the complete integration of Fiat Chrysler.Neither does the market fully appreciate the value of the underlying assets of Fiat Chrysler.We expect the Ferrari separation to be completed in the first quarter of 2016, unlocking an undervalued asset for shareholders.With a 4-star rating and the stock currently trading at a 35% discount to our EUR 20 fair value estimate, we think investors can own Ferrari through Fiat Chrysler at a compelling valuation.Analyst: Richard J. HilgertFull Report below the fold....

Distracted by the Distractions: Focus on Fiat Chrysler's attractive stock valuation

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.

Thematic (Sector/Industry)

<ul><li>The S&amp;P500 moved sharply lower overnight, shedding 3% apparently on continued concerns about China's future growth prospects.&nbsp; Despite the correction in recent months, the stock market still doesn't look particularly cheap, with the prospective PE on the S&amp;P500 still higher than historical norms. &nbsp;The headwinds facing US stock investors stem from the stagnation in expected profitability over the past 12 months.&nbsp;</li><li>For Australia, the market&rsquo;s prospective PE of 14.5x suggests that the market is neither cheap or expensive at current levels.&nbsp; Like the US, the key headwind facing corporate Australia is the stagnation of future growth prospects, which has now dragged on for five years now due to the terms of trade shock.&nbsp;</li><li>As far as reporting season goes, the market continues to punish even small misses from high growth stocks.&nbsp; I discuss the market pricing for Seek.com and other market darlings that have confronted growth stalls in the past year.</li></ul>

The S&amp;P500 moved sharply lower overnight, shedding 3% apparently on continued concerns about China's future growth prospects.&nbsp; Despite the correction in recent months, the stock market still doesn't look particularly cheap, with the prospective PE on the S&amp;P500 still higher than historical norms. &nbsp;The headwinds facing US stock investors stem from the stagnation in expected profitability over the past 12 months.&nbsp;For Australia, the market&rsquo;s prospective PE of 14.5x suggests that the market is neither cheap or expensive at current levels.&nbsp; Like the US, the key headwind facing corporate Australia is the stagnation of future growth prospects, which has now dragged on for five years now due to the terms of trade shock.&nbsp;As far as reporting season goes, the market continues to punish even small misses from high growth stocks.&nbsp; I discuss the market pricing for Seek.com and other market darlings that have confronted growth stalls in the past year.

United States

Stellantis NV manufactures and markets automobiles and commercial vehicles. The Company also produces metallurgical products and production systems for the automobile industry, as well as owns publishing and insurance companies. Stellantis serves customers worldwide.

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Stellantis NV (STLA US)

Distracted by the Distractions: Focus on Fiat Chrysler's attractive stock valuation

No-moat, 4-star-rated Fiat Chrysler's stock has 55% upside to our EUR 20 fair value estimate from its current trading level.Since the markets began...

Morningstar, Inc.

Weekly Impressions

The S&P500 moved sharply lower overnight, shedding 3% apparently on continued concerns about China's future growth prospects. Despite the...

Sam Ferraro

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