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☆ MORNINGSTAR: These 11 regional bank stocks are deeply undervalued and should survive the intense pressures hitting the sector today
▼ + stars: | 2023-05-14 | by ( Marley Jay | ) www.businessinsider.com time to read: +2 min

Morningstar's chief US stock strategist says many regional bank stocks are dramatically oversold. Dave Sekera says a handful of bank stocks can be had for less than half of their fair values. If you haven't heard, bank stocks are having a bad time. The iShares US Regional Banks ETF, which tracks the sector, is down 40% over the last six months. Sekera wrote that earnings for regional banks will continue to decline for the rest of 2023, then start to recover next year.

☆ China's top chipmaker will 'struggle' to make cutting-edge chips competitively
▼ + stars: | 2023-04-28 | by ( Sheila Chiang | ) www.cnbc.com time to read: +5 min

China's largest chipmaker SMIC won't be able to produce cutting-edge chips competitively if it continues to be cut off from advanced equipment, analysts told CNBC. Vcg | Visual China Group | Getty ImagesChina's largest chipmaker SMIC won't be able to produce cutting-edge chips competitively if it continues to be cut off from advanced equipment, analysts told CNBC. Following the 2020 sanctions, the U.S. last year introduced sweeping export restrictions aimed at cutting China off from advanced chip tech and equipment. The Netherlands as well as Japan have reportedly followed the U.S. in imposing rules aimed at restricting China from accessing advanced chip tech. "Can SMIC produce in a commercially viable way scaled by the hundreds of thousands or tens of millions in some cases?

☆ Morningstar's chief U.S. market strategist shares his outlook for the economy and ways to play the market turbulence ahead
▼ + stars: | 2023-04-27 | by ( Samantha Subin | ) www.cnbc.com time to read: +6 min

But even in a turbulent environment, there are value opportunities for investors who look carefully, according to Dave Sekera, Morningstar's chief U.S. market strategist. "We think the stock market is undervalued," Sekera told CNBC during an interview at the Morningstar Investment Conference in Chicago. "However, I'd say at this point, the easy returns have already been made thus far this year, and I do see a rough road ahead for the next couple of quarters for the stock market in general." For regional bank stocks, Morningstar expects earnings to slowly decline through 2023. Today, Morningstar views many of those names, in areas such as energy, healthcare and consumer defensives, as fully valued.

☆ The growth fund that dodged the worst of the 2022 bear market by leaning on fundamentals
▼ + stars: | 2023-04-23 | by ( Alex Harring | ) www.cnbc.com time to read: +7 min

The firm's $1.7 billion Large Cap Growth Fund , with some of the biggest technology names among its top holdings, lost 24.3% in 2022. 'Rigor and process' Kantor and Regenbaum have spent years managing the fund by taking a magnifying glass to the inner plumbing of some of the biggest growth stocks. Indeed, Morningstar says the fund's portfolio has a lower price-to-book-value than other large cap growth funds or Morningstar's benchmark index for the group, and faster book value growth. There were "crazy growth companies that went to the moon," Kantor said, "and then unfortunately at some point had to return to Earth." Investors are at an important moment given the Federal Reserve's campaign to rein in inflation by hiking interest rates, and the interest-rate sensitive nature of growth stocks.

☆ Morningstar: Stocks are historically cheap — buy these 33 top undervalued names to brace for a volatile market today and profit from the recovery later this year
▼ + stars: | 2023-04-15 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +5 min

In a recent note, Morningstar shared its top 33 undervalued stocks to buy for the second quarter. While the near term may look difficult for investors, Sekera believes that these headwinds will force the Federal Reserve to pump the brakes on its rate-hiking program sooner rather than later. Valuations-wise, small-cap firms remain the cheapest, while mid-cap and large-cap stocks respectively remain just below and above market average. In a separate note, Morningstar analysts listed their top 33 undervalued stocks for the second quarter of 2023. The full list of names is below, along with each company's ticker, sector, market capitalization, and price versus fair value estimate.

☆ How the Fed is reshaping the labor market and why the nature of work is shifting, according to LinkedIn’s principal economist
▼ + stars: | 2023-04-15 | by ( Phil Rosen | ) www.businessinsider.com time to read: +5 min

Today's newsletter may not include a job offer, but it will give you a better grasp of what to look for in this still-hot labor market. I'm excited to share this week's conversation with one of the leading experts on jobs and hiring trends. How is that showing up in the labor market? What about the role of AI in the labor market? What do you think of Berger's insights on the labor market?

☆ Morningstar: Buy these 10 cheap, defensive stocks to survive a rough second quarter and position for better times ahead
▼ + stars: | 2023-04-12 | by ( Marley Jay | ) www.businessinsider.com time to read: +2 min

Morningstar's chief US market strategist says stocks will stay choppy over the next few quarters. But Dave Sekera also says patient investors can position themselves for future success. "According to our valuations, investors appear best positioned in a barbell-shaped portfolio by being overweight value and growth and underweight core." For now, Sekera wrote, stocks are likely to stay inside their recent trading range, with positive and negative economic news dictating their course. The 10 stocks below are ranked from lowest to highest based on the upside Morningstar believes they have relative to their fair value.

☆ One of the minds behind a $7.6 billion ETF details the 5-part approach the fund uses to select companies with competitive advantages — and recommends 10 stocks that fit the bill right now
▼ + stars: | 2023-04-06 | by ( James Faris | ) www.businessinsider.com time to read: +5 min

The VanEck Morningstar Wide Moat ETF has enjoyed strong gains with this strategy. Much like the stocks it targets, the VanEck Morningstar Wide Moat ETF (MOAT) doesn't have much competition. A focus on companies with economic moats, combined with low competition, has helped the MOAT ETF grow to $7.6 billion in assets since its inception in April 2012. It uses fundamental, bottom-up research from the team that compiles Morningstar's Wide Moat Focus Index to target high-quality companies that are set to outperform. "It doesn't stop at just finding a company that has established a competitive advantage," Rakszawski told Insider.

☆ Buy Berkshire Hathaway stock for Warren Buffett's steady hand during crises, says Morningstar
▼ + stars: | 2023-03-20 | by ( Yun Li | ) www.cnbc.com time to read: +2 min

Warren Buffett's long history of aiding failing banks is one reason for investors to buy Berkshire Hathaway shares now, in the midst of the latest banking blowup, according to Morningstar. "Another banking crisis, another call to Buffett," Morningstar analyst Greggory Warren said in a note Monday. The legendary investor has been a white knight for troubled banks on other occasions. Buffett also famously came to Goldman Sachs' rescue with a $5 billion cash infusion after the collapse of Lehman Brothers in 2008. The analyst said Berkshire shares are appealing right now and could serve as downside protection given its diverse businesses and unmatched balance sheet strength.

The Biden administration and CFIUS are pushing for a sale of TikTok in the US. The Chinese government could also block a TikTok sale outright before bidding kicks off. But the list of companies that would actually consider buying TikTok is small, experts told Insider. "I think Microsoft would be one of the only big money, big company possibilities." Ultimately, separating TikTok's US operations, whether in a sale to a big tech firm or a spin off, is complicated.

☆ Get income and feel good about it: ESG-focused bond funds saw greater inflows than stock funds last year
▼ + stars: | 2023-03-01 | by ( Alex Harring | ) www.cnbc.com time to read: +3 min

Socially conscious investors favored bond funds more than stocks for the first time, new Morningstar data shows. Sustainable bond funds amounted to three-fourths of overall net flows within sustainable funds, up from 16% in 2021. That jump helped fixed income funds overtake equity-focused peers in holding the lion's share of net inflows last year. Sustainable bond funds posted a $2.4 billion net annual inflow, compared with a loss of $335 billion seen among non-sustainable taxable- and municipal-bond funds. Still, the top fixed sustainable income funds held up better than the broader stock market last year.

☆ Top Morningstar strategist names a deeply discounted tech stock, in a sector poised for strong growth
▼ + stars: | 2023-02-27 | by ( Weizhen Tan | ) www.cnbc.com time to read: +2 min

Dave Sekera, chief U.S. market strategist for Morningstar, is bullish on one corner of tech that he says is set to experience "some of the strongest long-term secular growth." That's cybersecurity, he told CNBC's "Squawk Box Asia" on Thursday. "Between geopolitical risks, ransomware and hacking, this is just one area that's going to have a lot of secular growth," Sekera said. Sekera names one stock that he says is trading at about a 25% discount to Morningstar's fair value estimates: CrowdStrike . Analysts have struck a bullish tone on cybersecurity of late, arguing that it's one sector that's resilient even in a slowdown.

☆ James Abate's stock fund has nearly doubled its benchmark over 3 tumultuous years. Here's how he says investors should get ready for potential black swan events that could shape 2023.
▼ + stars: | 2023-02-07 | by ( Marley Jay | Lisa Kailai Han | ) www.businessinsider.com time to read: +5 min

Kiplinger rates the fund as the best US large-company stock fund from 2020 to 2022. That's not the most encouraging backdrop for stocks, especially since Abate said investors will be less comfortable taking big risks. He added that while the beginning of 2023 has been the opposite of 2022, that's not going to last. For the first black swan, Abate pointed towards the escalation of the Russian-Ukraine crisis, including the recent increase in air defense activity, ground troops, and the shipment of armored vehicles, tanks, and fighter aircraft. As for the second black swan, Abate also highlighted the Japanese government's "unprecedented" and "unsustainable" buying of the yen to boost the currency against others like the dollar.

☆ Morningstar: These 10 top stocks have strong cash flow, smart management teams, and are trading way below fair market value — making them the perfect investments to add to your portfolio as the chance
▼ + stars: | 2023-02-05 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +3 min

Here are Morningstar's top 10 stock picks that are trading as much as 35% below fair market value. 2023 has barely begun, but the stock market is already off to the races. But the ongoing market rally has revealed investors' newfound optimism around peaking inflation, China's reopening, and hopes for a dovish Federal Reserve pivot sometime this year. Still, the question remains: is this finally the bull market rally investors have been waiting for, or is it doomed to eventually collapse? The full list of 10 stocks is below, along with each firm's ticker, industry, market capitalization, and current price-to-fair value ratio.

☆ Buy the dip? Top Morningstar strategist names 3 stocks trading at a steep discount
▼ + stars: | 2023-01-27 | by ( Weizhen Tan | ) www.cnbc.com time to read: +2 min

For now, U.S. stocks are around 15% undervalued, according to Sekera, who says the extent of this undervalued territory is rare. 'Undervalued' stocks Sekera names three stocks he says are undervalued right now, trading at a steep discount to Morningstar's fair value estimates. Medical technology firm Medtronic made his list: The stock is trading at a 28% discount to Morningstar's fair value estimate. Sekera also named Citi , which is trading at a 34% discount to Morningstar's fair value price. The stock is trading at a more-than 20% discount to Morningstar's fair value estimate.

☆ High yields have investors piling into money market funds. Here's what you need to know
▼ + stars: | 2023-01-25 | by ( Michelle Fox | ) www.cnbc.com time to read: +7 min

High yields and a volatile stock market have investors piling into money market mutual funds. Yet for retail funds, inflows are still climbing — the week ended Jan. 18 saw a $4.97 billion increase into retail money market funds, to bring net assets to a total of $1.74 trillion. One thing to keep in mind is that a money market fund is not FDIC-insured, while a money market account at a bank is insured. "If your money market fund yield is lagging, you probably have a high expense money fund." The net asset value of money market funds is normally maintained at $1 share.

☆ Morningstar: Buy these 10 cheap, high-quality stocks that pay a healthy dividend to help offset stock market losses and slowing economic growth
▼ + stars: | 2023-01-24 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +3 min

Dividend stocks may take center stage during rough economic conditions in 2023. Morningstar's Dave Sekera recently listed 10 cheap, high-quality dividend-paying stocks to buy now. As equity valuations slumped into an official bear market last year, high-quality dividend-paying stocks took center stage to rise above their more speculative peers. According to Morningstar chief US market strategist Dave Sekera, it's no coincidence that dividend stocks stole the show in 2022. 10 high-quality dividend payersIn the video, Sekera identified 10 high-quality stocks that are currently trading below their fair values, have high upside potential, and have a "relatively decent or healthy" dividend yield payout.

Bed Bath & Beyond did not take questions from analysts on its Tuesday conference call "in light of the ongoing review of strategic alternatives," said Susie Kim, head of investor relations. "It's definitely a cause for concern," said bankruptcy lawyer Daniel Gielchinsky, who does not represent Bed Bath & Beyond. Bed Bath & Beyond said it started cost reductions of about $80 million to $100 million across the business. Morningstar analyst Jaime Katz expects a Bed Bath & Beyond bankruptcy filing in the first half of 2023. The retailer reported a non-GAAP loss of $3.65 per share, wider than Wall Street's estimate of a loss of $2.23 per share.

☆ 'Stocks look downright cheap': These are the top 33 bargain stocks to buy heading into 2023, according to Morningstar
▼ + stars: | 2023-01-10 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +4 min

Right now the cheapest stocks are in the communication services sector, where they are currently trading 43% below Morningstar's fair value estimates. Healthcare and real estate stocks also seem undervalued, trading 11% and 25%, respectively, below fair price estimates. Within the sector software stocks are trading at a 23% discount, semiconductor stocks are 12% undervalued, and hardware stocks are 15% undervalued, according to Morningstar sector director Brian Colello. On the other hand, consumer defensives and industrials seem to be starting 2023 off trading around fair value, while utilities stocks currently look about 5% overvalued. These stocks are listed below, along with each firm's ticker, market capitalization, sector, and price over fair value estimate.

☆ These 12 small-cap stocks are undervalued and trading at deep discounts of up to 80%, according to Morningstar
▼ + stars: | 2023-01-06 | by ( Laila Maidan | ) www.businessinsider.com time to read: +3 min

Small-cap stocks are trading at the greatest discount relative to their larger counterparts. Instead, investors spent the year shifting from growth to value stocks in an attempt to seek a safe haven. He specified small-cap stocks, which are trading at the greatest discount relative to their larger counterparts. The Federal Reserve is then expected to ease its monetary policy, which would lead to a rebound in the stock market. The caveat is that many of these small-cap stocks also have a high uncertainty rating, which indicates how closely Morningstar thinks its forecast will match the company's outcome.

☆ The market's most political stock picks had a bad year, but they'll be back in 2023
▼ + stars: | 2022-12-27 | by ( Tim Mullaney | ) www.cnbc.com time to read: +4 min

Analysts who follow the industry say ESG funds' performance has been held back, most clearly, by the fact that many sustainable or ESG funds avoid companies that make fossil fuels. The average large-cap stock ESG fund had lost nearly 20% in 2022 through Dec. 21, according to Morningstar. Morningstar energy strategist Stephen Ellis thinks that's unlikely, since "we see the stocks as fairly valued to expensive," particularly in the oil part of the petroleum business. ETF – which emphasizes gambling and alcohol along with pharmaceuticals, without major holdings in oil and gas – is down 18%. ESG fund flows in Europe have held up much better than in the U.S, which Morningstar's Stankiewicz says is because of more pro-ESG regulations.

☆ Morningstar shares 2 trades they say will deliver 7% yearly returns over the next decade, even after accounting for inflation — and breaks down why the 60/40 portfolio strategy is starting to look att
▼ + stars: | 2022-12-20 | by ( William Edwards | ) www.businessinsider.com time to read: +4 min

But the sell-offs have put both asset classes in a better position to succeed for the long-term, Straehl said in a recent note. While communication services stocks have largely sold off this year, the sector is now the most attractive in the market, Straehl said. The Vanguard Communication Services ETF (VOX) provides exposure to the communications services sector. The second trade Straehl said will deliver 7% real returns over the next 10 years is emerging market stocks. The stocks are in a more favorable place valuation-wise than developed market stocks, Straehl said.

☆ Alternative funds went gangbusters in 2022. How to find out if they’re right for you
▼ + stars: | 2022-12-20 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +4 min

Even the most diversified portfolios took their lumps in 2022, but one corner of the market is ending the year with a bang: liquid alternative funds. Major winners in the liquid alts space include the AQR Managed Futures Strategy HV Fund (QMHIX) , which popped 36% in 2022. The Arrow Managed Futures Strategy Fund (MFTFX) jumped 21%, while the AGFiQ U.S. Market Neutral Anti-Beta Fund (BTAL) leapt 18% this year. Other alternative funds aim to manage downside risk with options, but also provide an opportunity for appreciation. Consider how the Arrow Managed Futures Strategy Fund is up 21% in 2022, but was basically flat last year.

☆ Morningstar: Buy these 14 cheap stocks that still have room to rally in a bear market
▼ + stars: | 2022-11-24 | by ( Lisa Kailai Han | ) www.businessinsider.com time to read: +4 min

Contrary to intutition, bear market rallies may make it tougher for investors to do their jobs. Morningstar shared 14 stocks that are still cheap, despite beating the market. Then, they whittled that list down to the stocks that Morningstar analysts considered undervalued. Finally, Morningstar analysts highlighted AstraZeneca (AZN), noting its strong pipeline and its development of drugs that carry high pricing power. The full list of Morningstar's 14 undervalued bear market stars is below, along with each firm's ticker, sector, bear market return, and price discount.

☆ Buy these 26 retail stocks on their way to recovery as bearish investors oversold them ahead of the holiday shopping season, according to Morningstar
▼ + stars: | 2022-11-20 | by ( Marley Jay | ) www.businessinsider.com time to read: +3 min

Morningstar's Dave Sekera says it's a hard time for retail, but many stocks are too undervalued. He explained that a number of major retailers are trading for half of their fair value. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. Despite all that, Sekara thinks retail in general is getting oversold, with many stocks trading for just half of what Morningstar considers to be their fair value. Sekera named a series of stocks from across the retail and consumer technology spaces that have become overly cheap relative to Morningstar's fair value estimates.

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