E Piecemeal Coverage

I listened to Morningstar's presentation of its global prowess during its presentations to go on all week. Here are some goodies from Monday about how they can cover the whole world piecemeal with quantitative flimflam:

Its Jeremy Glaser explained how Morningstar can extend its analyst ratings to cover "more of the world." "We do have these analyst ratings. We have analysts who are covering stocks in the United States and Europe and Asia. Our research team has created a quantitative method that extends those ratings and tries to extrapolate what they think our ratings would be for stocks that we don't cover, market that we don't have analysts for, or stocks that are just too small for us to have full analyst coverage on. And using that data, we're able to get a snapshot of what equity valuations look like across the world."

If you think that is how to invest globally, I have a lovely bridge to Brooklyn I can sell you cheaply. While its broad coverage sounds less than deep, its detailed coverage also sounds weak. Here is about the UK quoting his commentary at a Morningstar conference by Clive Beagles who runs "silver" rated JOHNCM UK Equity Income Fund. It was posted yesterday but which sounds like it was from before the UK elections:

"For us, the key element actually is that certain stocks and sectors will do well as interest rates rise, and actually some might do quite badly. And some of those may be sectors that people previously have thought about as being very defensive. If you look at the rease hat we currently find attractive, it's things like financials, it's areas like commodities, or it's small caps—all of which are less fashionable."

"The more fashionable areas of the market right now would be biotech or technology or consumer staples. There might be some good-quality companies in those sectors, but they are valued on quite high multiples and it's hard for us to see how you make money in those sorts of names. You're more likely to make better returns from lower valuations as your starting point."


However, one of the managers, for an Australian fund group, Platinum Asset Mgm (PTM) after talking about her love for luggage from Samsonite (SMSOF), which is a European company, then turned her attention to one of our share favorites, so I will quote her remarks below.

There will be no blog tomorrow morning and only a news recap for paid subscribers after lunch. Today's blog has news from Britain, Israel, Myanmar, China, Canada, The Netherlands, India, Ethiopia and Africa, with an annual report, a conference call, and a sale. We catch up on our funds today.

Ding Dong Stocks

*Vodafone (VOD) has finally if barely reversed the drop in its core service sales after 3 years in Q4 (to Mar. 30) thanks to its £7 bn "Spring Initiative" 4G offers bundling land and cell phone lines, TV, and Internet boosting revenues. UK telco VOD with 446 million mobile customers globally, eked out Q4 "organic service revenue", excluding marketing costs like cellphone subsidies, up all of 0.1%, the first plus sign after after 10 quarters of declines. Q4 revenue rose 10.1% but EBITDA, (earnings before interest, tax, depreciation, and amortization) fell 6.9% to £11.9 bn in the quarter.

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