Morningstar Rating for Stocks: Difference between revisions

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The Morningstar Rating for Stocks debuted in 2001 and was initially applied to 500 stocks.^[1]^[2] The stock-rating system compares a stock's current market price with Morningstar's estimate of the stock's fair value.^[3] Like the Morningstar Rating for Funds, the rating is applied in the form of stars.^[4] According to Newsday, “A five-star rating is given to a stock if fair value is 30 percent or more above current market price, four stars if it is 10 percent to 30 percent above, and three stars for fair value 10 percent either side of price. A two-stars rating goes to issues with fair value 10 percent to 30 percent below price, while one star reflects value that is 30 percent or more below price."^[1]

Five-star stocks, should offer an investor a return that's higher than the company's cost of equity. Low-rated stocks have significantly lower expected returns. Three-star stocks are those that should offer a "fair return," one that adequately compensates for the riskiness of the stock. They should also offer investors a return that's roughly comparable to the stock's cost of equity.^[3]

References

^ ^a ^b "Morningstar Providing Stock Ratings". Newsday: F05. August 12, 2001 – via Factiva.
^ Miller, Rick (September 3, 2001). "For stock outlook, look to the stars". InvestmentNews. 5: 8 – via Factiva.
^ ^a ^b "Morningstar Rating for Stocks". Morningstar.com. Retrieved 2020-11-30.
^ Carter, Ron (November 11, 2001). "MORNINGSTAR'S NAME ON STOCK ANALYSIS A SAVVY MOVE". The Columbus Dispatch: 03 – via Factiva.

[:0-1] "Morningstar Providing Stock Ratings". Newsday: F05. August 12, 2001 – via Factiva.

[2] Miller, Rick (September 3, 2001). "For stock outlook, look to the stars". InvestmentNews. 5: 8 – via Factiva.

[:1-3] "Morningstar Rating for Stocks". Morningstar.com. Retrieved 2020-11-30.

[4] Carter, Ron (November 11, 2001). "MORNINGSTAR'S NAME ON STOCK ANALYSIS A SAVVY MOVE". The Columbus Dispatch: 03 – via Factiva.

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-The '''Morningstar Rating for Stocks''' debuted in 2001 and was initially applied to 500 stocks.<ref name=":0">{{Cite journal|last=|first=|date=August 12, 2001|title=Morningstar Providing Stock Ratings|url=|journal=Newsday|volume=|pages=F05|via=Factiva}}</ref><ref>{{Cite journal|last=Miller|first=Rick|date=September 3, 2001|title=For stock outlook, look to the stars|url=|journal=InvestmentNews|volume=5|pages=8|via=Factiva}}</ref> The stock-rating system compares a stock's current market price with Morningstar's estimate of the stock's [[fair value]].<ref name=":1">{{Cite web|last=|first=|date=|title=Morningstar Rating for Stocks|url=http://www.morningstar.com/InvGlossary/morningstar_rating_for_stocks.aspx|url-status=live|archive-url=|archive-date=|access-date=2020-11-30|website=Morningstar.com}}</ref> Like the Morningstar Rating for Funds, the rating is applied in the form of stars.<ref>{{Cite journal|last=Carter|first=Ron|date=November 11, 2001|title=MORNINGSTAR'S NAME ON STOCK ANALYSIS A SAVVY MOVE|url=|journal=The Columbus Dispatch|volume=|pages=03|via=Factiva}}</ref> According to Newsday, “A five-star rating is given to a stock if fair value is 30 percent or more above current market price, four stars if it is 10 percent to 30 percent above, and three stars for fair value 10 percent either side of price. A two-stars rating goes to issues with fair value 10 percent to 30 percent below price, while one star reflects value that is 30 percent or more below price."<ref name=":0" />
+The '''Morningstar Rating for Stocks''' debuted in 2001 and was initially applied to 500 stocks.<ref name=":0">{{Cite journal|date=August 12, 2001|title=Morningstar Providing Stock Ratings|journal=Newsday|pages=F05|via=Factiva}}</ref><ref>{{Cite journal|last=Miller|first=Rick|date=September 3, 2001|title=For stock outlook, look to the stars|journal=InvestmentNews|volume=5|pages=8|via=Factiva}}</ref> The stock-rating system compares a stock's current market price with [[Morningstar, Inc.|Morningstar]]'s estimate of the stock's [[fair value]].<ref name=":1">{{Cite web|title=Morningstar Rating for Stocks|url=http://www.morningstar.com/InvGlossary/morningstar_rating_for_stocks.aspx|access-date=2020-11-30|website=Morningstar.com}}</ref> Like the Morningstar Rating for Funds, the rating is applied in the form of stars.<ref>{{Cite journal|last=Carter|first=Ron|date=November 11, 2001|title=MORNINGSTAR'S NAME ON STOCK ANALYSIS A SAVVY MOVE|journal=The Columbus Dispatch|pages=03|via=Factiva}}</ref> According to [[Newsday]], “A five-star rating is given to a stock if fair value is 30 percent or more above current market price, four stars if it is 10 percent to 30 percent above, and three stars for fair value 10 percent either side of price. A two-stars rating goes to issues with fair value 10 percent to 30 percent below price, while one star reflects value that is 30 percent or more below price."<ref name=":0" />
-Five-star stocks, should offer an investor a return that's higher than the company's [[cost of equity]]. Low-rated stocks have significantly lower expected returns. Three-star stocks are those that should offer a "fair return," one that adequately compensates for the riskiness of the stock. They should also offer investors a return that's roughly comparable to the stock's cost of equity.<ref name=":1" />
+Five-star stocks, should offer an [[investor]] a return that's higher than the company's [[cost of equity]]. Low-rated stocks have significantly lower [[expected return]]s. Three-star stocks are those that should offer a "fair return," one that adequately compensates for the riskiness of the stock. They should also offer investors a return that's roughly comparable to the stock's cost of equity.<ref name=":1" />
 == References ==
 {{Reflist}}
+[[Category:Financial data vendors]]
-{{Uncategorized|date=December 2020}}
+[[Category:Financial services companies established in 2001]]