Morningstar Advisor - August/September 2012 - (Page 21)

Stock: Western Union WU Fair Value Estimate $29 Morningstar Rating QQQQQ Uncertainty Medium Economic Moat Wide Avg. Credit Quality Z Market Cap $10.3 billion YTD Stock Price Compared With Fair Value Estimate 40 Daily stock price Fair value estimate (Gaps indicate when fair value estimate was under review.) 20 6/30/11 9/30/11 12/31/11 3/31/12 Industry growth, market opportunities, and considerable competitive advantages position Western Union for long-term success. About 200 million people live outside their country of origin, and the ongoing growth in the worldwide immigration population has driven historical money transfer growth. Western Union is the clear leader in an industry where size confers significant advantages. The money transfer business is scalable because the incremental costs of processing additional transactions are minimal. This gives Western Union a marked cost advantage over its rivals, and its operating margins are about twice that of its closest competitors. We think Western Union can expand its already dominant industry position. It processes about 4 times the transactions of its closest competitor, MoneyGram MGI, but has less than 20% market share. This leaves the company plenty of room to grow as the industry consolidates. Brett Horn 40 Hindsight: June/July 2011 Our picks from a year ago were a mixed bag. Stock-pick Visa V was a home run, soaring 45.3% over the period due to strong revenue and earnings growth. Mutual fund pick Artisan Value ARTLX handily beat its Russell 1000 Value benchmark thanks to savvy tech picks such as Apple AAPL, and its management team won the award for Morningstar Domestic Equity Manager of the Year for 2011. Separate account Dodge & Cox Balanced lagged its typical moderate-allocation peer due 20 to a bigger-than-average equity stake in a weak 0 7/20/119/14/1111/10/111/10/12 3/2/12 5 7/21/119/9/11 11/2/11 1/5/12 3/5/12 5 7/22/119/15/1111/11/111/11/12 3/6/12 7/25/119/16/1111/14/111/6/12 3/12/12 7/26/119/19/1111/15/111/12/12 3/7/12 7/27/119/20/1111/16/111/9/12 3/13/12 7/28/119/21/1111/17/111/13/12 3/8/12 7/29/119/22/1111/18/111/16/12 3/14/12 8/1/11 9/23/1111/21/111/17/12 3/9/12 8/2/11 9/26/1111/22/111/18/12 3/15/12 8/3/11 9/27/1111/23/111/19/12 3/16/12 8/4/11 9/28/1111/24/111/20/12 3/19/12 8/10/1110/4/1111/30/111/26/123/20/12 8/5/11 9/29/1111/25/111/23/12 3/21/12 8/11/1110/10/1112/6/111/27/123/22/12 8/8/11 9/30/1111/28/111/24/12 3/23/12 8/12/1110/11/1112/12/112/2/12 3/26/12 8/9/11 10/3/1111/29/111/25/12 3/27/1 8/15/1110/12/1112/13/112/3/12 3/28/1 8/16/1110/13/1112/14/112/6/12 3/29/1 8/17/1110/14/1112/15/112/10/124/2/1 8/18/1110/17/1112/16/112/13/12 4/5/1 8/29/11 11/7/11 8/30/11 11/8/11 8/31/11 11/9/11 10/5/11 12/1/11 1/30/12 3/30/1 10/6/11 12/2/11 1/31/12 4/6/1 10/7/11 12/5/11 2/1/12 4/9/ 12/7/11 2/7/12 12/8/11 2/8/12 12/9/11 2/9/12 6/30/118/24/1110/21/1112/22/112/17/124/115 7/1/118/19/1110/18/1112/19/112/14/124/3/1 7/5/118/22/1110/19/1112/20/112/15/124/4/1 7/11/11 9/1/1110/26/1112/27/112/22/124/16 7/6/118/23/1110/20/1112/21/112/16/124/10 7/12/11 9/2/1110/27/1112/28/112/23/124/17 7/7/118/25/1110/24/1112/23/112/20/124/12 7/13/11 9/6/1110/28/1112/29/112/24/124/1 7/8/118/26/1110/25/1112/26/112/21/124/13 7/14/11 9/12/1111/3/1112/30/112/27/124/2 7/15/11 9/7/1110/31/11 1/2/12 2/28/124/2 7/18/11 9/13/1111/4/11 1/3/12 2/29/12 4/2 7/19/119/8/11 11/1/11 1/4/12 3/1/12 4/ 12 months for stocks. Meanwhile, ETF pick Cambria Global Tactical GTAAX’s trend-following models struggled in a choppy market. Greg Carlson Pick Type Cum Rtn to Date (%) Back Then, We Said ... Now, We Say ... Artisan Value Fund Investor Shares ARTLX MF Cambria Global Tactical ETF GTAA Dodge & Cox Balanced Visa, Inc. V ETF SA S –0.89 –10.54 –4.30 45.25 “Looks well-suited for the times…” “A unique investment strategy” “Managers have made a lot of good moves…” “One of the widest economic moats around” “A very solid holding…” “Its value will be seen over the long term…” “Still on offense…” “Competiition is on the rise…” S&P 500 TR Index 0.64 The June/July 2011 issue was mailed to subscribers in June 2011. Return data is from June 1, 2011, through June 1, 2012. MorningstarAdvisor.com 21 http://www.MorningstarAdvisor.com

Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2012

Morningstar Advisor - August/September 2012
Contents
Contributors
Letter From the Editor
How Much of the Behavior Gap Is Your Fault?
What’s Your View of the Muni-Bond Market?
A Balanced Life
How to Get to Know EMMA
A Strong, Robust Fund Business
Dividend Investing Abroad
Four Picks for the Present
Investment Briefs
Fund Expenses Through the Decades
Autos on Comeback Track
Lessons From the Muni-Bond Rebound
Municipal-Bond Landscape Shifts
Municipal Bonds 101
A Tale of Two Cities
Unraveling the Mysteries of Money
Small Companies Mean the World to Him
The Chinese Art Market and the Origin of Bubbles
The Myth of the Dumb Investor
Stocks That Can Stand the Heat
Our Favorite Mutual Funds
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
The War on Savers

Morningstar Advisor - August/September 2012