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)

Australia Media / Thematic (Sector/Industry)

<a href="https://www.smartkarma.com/entities/708" target="_blank" data-smartkarma-citation="entities:708:1">Nine Entertainment Co Holdings Ltd (NEC AU)</a> is our preferred stock in the television sector. Despite rising 22% since the February result, shares remain at a 21% discount to our AUD 1.50 fair value estimate.Nine has enjoyed a solid start to 2017, especially in February when its All-People rating share jumped to 36.2%, from 33.3% a year ago. While we can fathom the popularity of cricket, the positive reception to "Married at First Sight" shows just how out of touch this author is when it comes to judging television shows. The ratings momentum supports our thesis for Nine's share of the metropolitan television advertising market to increase to 37.5% longer term, from 35.3% currently. We expect this to provide the springboard for Nine to reach our mid-cycle television EBITDA margin of 17.0%, from an estimated 15.0% in fiscal 2017. Its 50% ownership of Stan and potential cuts to affiliation fees in the May Federal budget offer further upside.<a href="https://www.smartkarma.com/entities/194" target="_blank" data-smartkarma-citation="entities:194:1">Ten Network Holdings Ltd (TEN AU)</a> is trading at a 52% discount to our AUD 1.20 fair value estimate. However, the upside comes with a very high fair value certainty. The effect of Ten's recent improving ratings is being ameliorated by the weak advertising market. Critically, there is a need for continuing content reinvestment to sustain the current ratings momentum—a strategic bind that has tipped Ten back into a loss-making position for the near term.<a href="https://www.smartkarma.com/entities/804" target="_blank" data-smartkarma-citation="entities:804:1">Seven West Media Ltd (SWM AU)</a> is trading at a 15% discount to our AUD 0.85 fair value estimate. Despite the discount, the muted start to the ratings season and the incessant noise surrounding the legal dispute with a former employee provide grounds for caution.Analyst: Brian Han

Nine Entertainment Co Holdings Ltd (NEC AU) is our preferred stock in the television sector. Despite rising 22% since the February result, shares remain at a 21% discount to our AUD 1.50 fair value estimate.Nine has enjoyed a solid start to 2017, especially in February when its All-People rating share jumped to 36.2%, from 33.3% a year ago. While we can fathom the popularity of cricket, the positive reception to "Married at First Sight" shows just how out of touch this author is when it comes to judging television shows. The ratings momentum supports our thesis for Nine's share of the metropolitan television advertising market to increase to 37.5% longer term, from 35.3% currently. We expect this to provide the springboard for Nine to reach our mid-cycle television EBITDA margin of 17.0%, from an estimated 15.0% in fiscal 2017. Its 50% ownership of Stan and potential cuts to affiliation fees in the May Federal budget offer further upside.Ten Network Holdings Ltd (TEN AU) is trading at a 52% discount to our AUD 1.20 fair value estimate. However, the upside comes with a very high fair value certainty. The effect of Ten's recent improving ratings is being ameliorated by the weak advertising market. Critically, there is a need for continuing content reinvestment to sustain the current ratings momentum—a strategic bind that has tipped Ten back into a loss-making position for the near term.Seven West Media Ltd (SWM AU) is trading at a 15% discount to our AUD 0.85 fair value estimate. Despite the discount, the muted start to the ratings season and the incessant noise surrounding the legal dispute with a former employee provide grounds for caution.Analyst: Brian Han

Ranking the Three Networks in No-Moat Television Sector