Friday fundamentals webinar: showcasing Morningstar's new site

-- | 10/05/2019

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Stefanie Harding: Hi, everyone. Thank you for joining us today. I'm Stefanie and I'm here today with Mark LaMonica, who is the Individual Investor Product Manager, to talk about the new Morningstar Premium website.

So, Mark, last time we did this, it was like a couple of weeks ago, and we were just about to release the new website. So, can you walk us through what has happened since last time we spoke?

Mark LaMonica: Yeah, absolutely. So, Stef said the last time we talked was late March and we were about to launch the new website. The first exciting thing that's happened since then is Stef got married. So, congratulations – I guess, somewhat public congratulations to Stef and Max.

Stefanie Harding: Thank you.

Mark LaMonica: So, that's exciting. But the other thing that's exciting is we did launch a new website. Now, I first wanted to reiterate what we're doing over the course of this year. We are building a new experience for our premium subscribers and we're building this new website in parallel with keeping our current website out there.

So, for anyone who is a subscriber to Morningstar Premium, you will still have access to everything on our old website and you also have the new capabilities that are on our new website. So, the plan is, for the rest of this year while we are building the new website, you will be able to chose where you want to access our research, data and editorial content.

So, I want to talk a little bit about what was on the website that we launched. So, really, three main things that we put on this website. So, as I said before, we have all of our research. So, one of the exciting things about the new website is we have expanded our research, which I'll get into in a second. We also have all our editorial content and all of our data, all of our global data. So, I'll quickly jump on and show everyone a couple of features on the website.

So, as I said, there's three main things that are on the website. So, first, we'll start with the editorial content. So, this is all the same editorial content that is on our current website. The advantage of the new website, I think, number one, it looks better, but also the advantage is that it is mobile-enabled. So, for instance, Your Money Weekly, which was published today, you can read Peter's overview from today. So, that is live on the website as well.

The other thing that we have, and I mentioned earlier that we did expand our research coverage is, we now offer international research coverage. So, you can go up to the search bar, up in the upper left-hand corner of the website, type in any security that you like and see if it's something we cover. So, on the current website we cover about 225 Australian securities. What we've done now is, we've expanded it to our global coverage. So, that's over 1,500 global securities. So, just because we are on Facebook Live, we can maybe use Facebook as an example.

So, Facebook, for example, is something that our team in the U.S. covers, our equity research team. So, that's the same methodology that's used as our team in Australia is used globally. So, here you can see our research coverage on Facebook. We clearly have it rated currently as 3 Stars. So, you can read the full analyst reports. Also, you can see all the data on the security as well. So, price to fair value, trailing returns and all the different financials. So, that's all available.

The other thing that we put on to this new website is what we have under Discover Investments. So, Discover Investments is really meant to curate some of the research based on different criteria that we preestablished. So, you can see we have a number of different screeners for stocks, same things for funds and ETFs. And just as an example, we can look at global equity. So, medalist ratings are the ratings that our manager research team assigns. So, you can simply go into the screener and you can see every ETF in Australia that has a medalist rating gets a Gold, Silver or Bronze rating by our analysts that is a global equity ETF. So, here you will see our top-rated are Silver and you can see Magellan Global Equities, for example, and you can simply click through and then read our actual research on that ETF.

So, those are the main things that we've launched at this point. And really, the plan as we go across the year is as we build something and test it, we will launch it onto the website. So, you will really get an incremental delivery of new features.

Stefanie Harding: All right. So, as you mentioned, the plan is to incrementally release new features. So, since we launched the website a couple of weeks ago in late March, has there anything been released?

Mark LaMonica: Yeah. So, one thing we released that I can show you on here is on the Discover Investments tab and is one of our most popular features actually, our Global Equity Best Ideas. So, what the Global Equity Best Ideas is, is our equity analysts in each of the geographies, so our team in Australia does this as well as our team in Asia, Europe and North America, they sit down and come up with what their best ideas are. And one of the reasons that this is a really popular feature is because, number one, you are getting all of the over 100 equity analysts' best opportunities in the market and also, to talk about our equity research stories a little bit, there's been a number of really good calls that they've made lately. So, a couple of examples – I can go through a couple of examples in a second, but first, you can see that this is the list. So, this comes out every month. So, on the 1st of May they came up with a new list. You can see that there's 77 securities. We got them sorted with Australia first. So, you can see that in Australia there are nine different securities that are on the list and then goes through the various geographies after that totaling 77 which you can keep loading.

So, a couple of examples of things. We do have a number of new items on the Global Equity Best Ideas list. And the reason for that is, we did take a lot off basically because they appreciated too much and their valuation changed, so we took them off the list. So, a couple of examples of those. InvoCare, so we put that on in June of 2018. So, it's up close to 15%. So, it was just removed from the list with this May edition. Crown Resorts, I this those people who have been following and obviously there is that Wynn bid on that. We put that in, in February. It was up 13% since then. So, came off the list. Carsales also went on in February, was up close to 9% since then.

So, another example is James Hardie. I can pull that up for us. So, James Hardie is also something just came off the list recently. So, we can see that. So, we put James Hardie on at the beginning of December, so pretty short amount of timeframe for that. So, I can go in and select – just to show an example, I can select the beginning of December when it went on, December 1st, and you can see up here that it's been up close to 15% since it went on the list. So, that's something else that came off. So, Global Equity Best Ideas is probably the major thing that we've released since the website has gone live. But as I said, yeah, we'll continue to release things as they are ready.

Stefanie Harding: Right. So, that's very interesting and exciting as well. And I think our subscribers also are very interested in what's going to be released next. So, I guess, if you can share that with us, that would be great.

Mark LaMonica: Yeah, absolutely. So, the next – and I can actually show you. I'll go into – our developers don't like this – but I'll go into our Dev environment and show something that will be released next week. So, Latest Research. So, really what we've done is we've embedded new cards into each of the stocks, ETFs and funds that shows sequentially what our analysts have released. So, what this really does is, it hopefully provides our subscribers with some perspective. So, this is a development environment. So, the stories on here are old. But one of the things that we really preach at Morningstar is that you really want to tune out the noise and really look at the valuation of the company.

So, in this case, you can see that things that we are worried about as investors, Brexit, certainly the trade tensions, you can really see what our analysts think about that. So, they will issue a new note if their outlook on a company changes. But in many cases, it's really sort of the day-to-day market noise that we try to ignore and what our analysts try to ignore because we all know that over-trading is not a great approach for successful long-term investing. So, releasing that.

The other thing that we are building that we are hoping to release by the end of May is the user-defined screener. So, I've showed you a number of different pre-configured screeners on here. But there's also the opportunity, many of our subscribers, as I do, like to go in and set their own criteria. So, in these screeners, we are building one for stocks, for funds, for ETFs, so you can screen based on Morningstar research, so you can use our criteria, but you can also screen on any of the underlying financial metrics that you may decide. And I think one of the best features about these is they are going to be savable. So, you can literally set up your own screens based on your set criteria and come at and periodically check that screen to see if a new security went on there. So, I think it's going to be a really great feature to try to generate some investment ideas so you can do further research.

Stefanie Harding: I'm sure it will be. So, that sounds very exciting. Why don't we start now taking questions from the audience maybe?

Mark LaMonica: Yeah, that sounds good.

Stefanie Harding: Yeah. So, have two that came in based on our email requests. The first one is, I've been using your site and noticed that some stocks receive quantitative ratings. What are those?

Mark LaMonica: Okay. That's a good question. So, quantitative rating. So, what we believe in as a company is, we believe in fundamental research. We really believe that it's looking at the underlying company, determining how much it's worth and comparing that to its current market valuation is a way that you uncover investment opportunities. So, I think, as I said before, we've got a little over 100 equity analysts around the world that are focused on full-time following the stocks that are within their purview.

Now, we cover 1,500 stocks globally. We cover 225 in Australia and New Zealand.

But there are obviously a lot more stocks out there. And we cannot hire enough equity analysts to cover the roughly 50,000 stocks that we have in our equity database that's available on the website.

So, what we've done is, we've tried to create a quantitative assessment methodology that's based on what our equity analysts do. So, we literally have a team that sits side-by-side with them that creates a methodology that's supposed to reflect how our equity analysts would rate those if they were rating them.

So, let me show you an example. So, let's take – if we're looking at Australia, how about Afterpay. So, Afterpay is a – Stef's husband also works at Afterpay. So, I thought it was a good example. So, Afterpay is a stock that we don't currently cover. It's something that there is a lot of talk about in the Australian market. So, you'll see here there is a Q above the Star Rating. So, that means it's quantitatively rated. So, there's not an equity analyst that follows this, but based on the model that's been set up, we still assign a fair value, you still get a Star Rating based on that fair value. And you can read a little bit about – so for every stock that is covered by the quant team, you can read a little bit about the methodology. So, it should be very clear what's a stock that's rated from the quant team and what's rated by our equity analysts. So, really what that does is, it brings our coverage, from, as I said, around 1,500 to the 50,000 securities globally that you can access on our new site and you can get the quant rating and that can be an indication of what we think about it and can lead you to potentially research that stock more.

Stefanie Harding: Yeah. Sure. Then the second question is, how do I access the new site.

Mark LaMonica: Okay. Yeah, absolutely. So, we are in the coming weeks going to start putting more calls to action on our current website to allow people to toggle back and forth between the two of them. Right now, you can see – hopefully, you saw on the shots earlier, you can see the URLs, it was

It is the exact same login and password as works on our current site. So, anybody can go to our site at any time. As I said, we'll start putting more things on our current site to have callouts for this site.

We are also going to start including it more in emails. So, I think, for people who receive Your Money Weekly email at about 10 am today and 10 am every Friday, you will see that the top stories, the editorial stories that we have at the bottom of the email, they all link to the new site.

And as I said, one of the advantages of the new site is that it is mobile-enabled. If you are like me, you get a lot of emails and they come in on your mobile phone, and so, simply clicking on that takes you to a better experience to actually read the editorial content.

Stefanie Harding: Yeah. That's great. Do we have any more questions from the audience? So, apparently, they are coming in.

Mark LaMonica: Yeah. So, we awkwardly sit here while people are ready to type and send them over.

Stefanie Harding: When do you expect the site to be finished?

Mark LaMonica: Yeah, it's a good question. So, our goal is to finalise it in Q3, probably towards the end of Q3. Once again, we will not retire the current site at that point.

There will be a time in 2020, we don't know exactly when, where we will retire the current site and have everything available on the new site. But once again, that will not happen this year. But we do hope to finish the site, continue to add the different tabs, we want to have the different features.

Basically, everything that you get right now in your subscription on the current site will be on here. So, yeah, we are hoping Q3, but we'll keep people informed as we do these things, the progress we make. And people can obviously see the progress themselves as we release new things and they go up here.

Stefanie Harding: Yeah, that's good. We don't have any more questions. So, that was today's Facebook Live. Thank you so much for participating and for the information. I think it's very useful for our subscribers.

Mark LaMonica: Yeah, great. Well, thanks Stef, and thank you guys for joining.

This report appeared on 2022 Morningstar Australasia Pty Limited

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