Morningstar Runs the Numbers
We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended Feb. 2.
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.
Our key takeaway from wide-moat Amazon's (AMZN) fourth-quarter update wasn't so much that the core building blocks of our longer-margin cash flow assumptions are intact, but that new sources are also becoming contributors sooner than anticipated, said consumer strategist R.J. Hottovy.
"We're planning to raise our fair value estimate from $1,250 per share to $1,600, with $75 of the increase attributed to time value of money, $100 due to a lower effective tax rate, and the remainder from more optimistic five-year revenue growth and margins estimates stemming from the aforementioned emergent cash flow drivers."
By mid-January, the yield on the 10-Year U.S. Treasury note rose above 2.6% (its highest level since mid-2014), and the prognostications calling for higher yields in 2018 started rolling in. Though we've seen this movie before, there are compelling and nuanced reasons to suggest that this time could be different, says Miriam Sjoblom, a director of global manager research. If you have rising-rate jitters, these four short-term bond funds will help you rest easy, Sjoblom says.
Apple (AAPL) reported strong results for the December quarter, with iPhone revenue strong due to a fewer units sold but a shift toward higher-priced units. Apple gave weak guidance for the March quarter, but that's not what surprised technology, media, and telecommunications sector director Brian Colello:
"Apple is holding onto $163 billion of net cash at this point, and they intend to spend almost all of it on dividends and buybacks over the next few years. They haven't given a time frame, but they'll update it in April after the March quarter. This is a move that surprised us. We thought that Apple would be a bit more conservative with its ability to access cash, as they have had a historically conservative capital structure."
Amazon, Berkshire Hathaway (BRK.B), and JPMorgan Chase (JPM) announced that the trio will form an independent healthcare company to help control costs for their U.S.-based employees. Speculation that this collaboration will disrupt the healthcare space has caused valuations of the pharmacy benefit managers, managed care organizations, drug wholesalers, and retail pharmacies to fall materially. But investors are underappreciating the moaty nature of the healthcare supply chain and the formidable competitive advantages that have insulated these firms, says senior analyst Vishnu Lekraj. Here are four solid wide-moat firms that are now selling at attractive discounts, in Lekraj's view.
Whether you a fan of postmodern architecture or not, it's hard to ignore the impact postmodernist buildings have had on many a grey landscape, according to this article on Google Arts and Culture. Using Google Street View, this virtual tour allows readers to explore 10 examples of this "quirky and experimental" architecture.
"Postmodern architecture emerged in the 1960s as a direct reaction against the minimalism and uniformity favored by modern architecture. ... The style opted for a more experimental and hybrid approach to architecture and flourished during the 1980s and 90s."
The deadline for filing your taxes is fast approaching--this year it's Tuesday, April 17. If you're a younger worker or if your income falls below certain thresholds, you may be eligible for some of these 12 tax deductions and credits.
Most Popular Articles
Most Popular Videos
Most Requested Stock Analyses
Most Requested Fund Analyses
Fidelity Growth Company
T. Rowe Price Capital Appreciation
Vanguard Short-Term Bond Index
Dodge & Cox Income
Most Requested ETF Analyses
Vanguard FTSE Emerging Markets ETF
Vanguard Dividend Appreciation ETF
Schwab US Dividend Equity ETF
Vanguard FTSE Developed Markets ETF
PowerShares QQQ ETF
Morningstar.com does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.