Morningstar Runs the Numbers

Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.

5% Looking at federal budget data, Bob Johnson, Morningstar's director of economic analysis, says tax revenues have grown a feeble 0.7% in the first quarter of 2017 (through April). A big part that growth came from the 5% growth in payroll taxes, and outside of that, there were few bright spots, in Johnson's opinion.

"The one category that is doing well is overall payroll taxes. That's the most directly measured, people that have a daily job and those payroll taxes are up about 5% year-over-year and that's a very, very big portion of the total tax take is those payroll taxes... So, that's the good news and unfortunately, that's about the end of the good news."

5 This far into a bull market, cash is unappealing because it's too hard for cash-heavy funds to keep pace with cashless indexes, says director of fund research Russ Kinnel. But, of course, that's some of its appeal, he says: Cash provides defense, and it's dry powder to put to use in a down market. He lists five Morningstar Medalists with big cash positions.

64,000 That's how many miles Barney the motorcycle-riding cocker spaniel has racked up during his cross-country travels with his owner, according to the Helena Independent Record.

"On an average year, the two travel close to 7,000 miles. Their longest adventure took them through Texas, Florida, Louisiana and the Outer Banks of North Carolina. By the time they got home, they had logged 10,000 miles together."

20% After weighing Disney's recent quarter results, equity analyst Neil Macker thinks wide-moat Disney shares are undervalued. The stock is currently trading about 20% below our fair value estimate.

7 Figuring out one's ideal, sustainable withdrawal rate in retirement is tricky and involves a lot of inherent guesswork, says director of personal finance Christine Benz. Rather than getting too bogged down in precision, though, Benz suggests that retirees should focus on what they know for sure about withdrawal rates to help guide their decision-making, then craft a withdrawal strategy that's customized to the situation, provides peace of mind, and allows for flexibility. She outlines seven widely agreed-upon points relating to withdrawal rates.

$15

We are maintaining our $15 fair value estimate for

"In our view, while Snap may be benefiting currently from a network effect among its users, we are not yet confident that the firm can effectively monetize its users on a consistent basis. … While the stock is trading down more than 20% in after-hours, we continue to recommend a wider margin of safety before investing in this no-moat and very high uncertainty rated name."

1.85% Market participants have been ratcheting down their inflation expectations this year, as indicated by the yield spread between nominal Treasury bonds and TIPS of the same maturity. The break-even rate was 1.85% as of May 10 according to data from the St. Louis Fed; it has fallen from a high of 2.08% on Jan. 26.

10 Growth-at-a-reasonable-price investors, listen up: This week, we examined the 500-plus holdings in the Morningstar US Growth Index and found 10 stocks with decent growth prospects that are trading at reasonable valuations.

4 Ready or not, here comes sustainable investing. Many prominent speakers and panelists at the Morningstar Investment Conference this year commented that environmental, social, and governance investing is no passing fad--it's growing in importance, and it's here to stay. Jon Hale, Morningstar's head of sustainability research, lists four trends that are moving the industry to increasingly consider sustainability when building portfolios.

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