Morningstar Advisor - August/September 2011 - (Page 20)

Investments à la Carte Four Picks for the Present Stock: Toyota TM Fair Value Estimate $117 Morningstar Rating Uncertainty High Economic Moat Narrow Credit Rating A+ QQQQ YTD Stock Price Compared With Fair Value Estimate 140 Daily stock price Fair value estimate 70 7/12/2010 11/12/2010 3/12/2011 Although Toyota has had to deal with more than its fair share of headwinds since early 2010, we believe most of these issues are short-term, and the world’s largest automaker is in prime position to outperform expectations. Down 15% from its pre-earthquake price and trading at less than 70% of our fair value estimate (as of June 24), market fright against Japanese equities and overblown concerns over Toyota’s supply chain disruptions provide potential investors with a significant margin of safety. New cost-cutting measures along with a return to full production likely by the end of the year has Toyota poised to capture pent-up demand for its brand and what we expect to be big growth in the auto industry. David Hirsch Mutual Fund: Artisan Value ARTLX Category 1 Large Value Asset Allocation Cash US Stock Non US Stock Bond Other Investment Style 1 Large Value Total Rtn Since Inception 3.12% Total Assets $396.2 million Expenses 1.18% Turnover Ratio 71 –100 –50 0 50 100 This fund has delivered on its potential. The management team, which has posted stellar returns at Artisan Small-Cap Value ARTVX and Artisan Mid-Cap Value ARTQX, has steered this large-value portfolio to top-quintile results since its 2006 inception. Why now? Although the fund has mounted a comeback in terms of relative performance in the first half of 2011 after a weak 2010, the top holdings in its compact portfolio are generally foundering and arguably cheap. Three of the fund’s four largest holdings—Cisco CSCO, Microsoft MSFT, and Target TGT—account for 14% of assets, have posted double-digit losses, and now earn an average of 4.33 stars from Morningstar’s equity analysts. (Five is the cheapest.) Greg Carlson Separate Account: Primecap Management Equity Category 7 Large Growth Asset Allocation Cash US Stock Non US Stock Bond Other Total Number of holdings 126 Assets in Top 10 holdings 27.71% Minimum Investment $100,000 U.S. Stocks 88.21% P/B Ratio 0.40 –100 –50 0 50 100 The team behind the successful Vanguard Primecap VPMCX and Vanguard Capital 120 Opportunity VHCOX consists of growth investors, but they’ve always possessed a 80 healthy contrarian streak. That has made for streaky returns at times. For example, the 40 mutual funds they run have posted humdrum relative returns in the post-bear-market bounceback, but that’s due in part to their concerns about the valuations of the rapid Fair Value - Daily growers that have led the way. Daily Closing Price Their bets can take a while to work out, but their remarkable long-term track record inspires confidence. Greg Carlson 0 5/10/10 7/1/108/19/1010/15/1012/16/102/14/114/4/11 5/11/10 7/2/108/20/1010/18/1012/17/102/15/114/5/11 5/12/10 7/6/108/23/1010/19/1012/20/102/16/114/11/11 5/13/10 7/12/10 9/1/1010/25/1012/27/102/23/114/15/11 5/14/10 7/7/108/24/1010/20/1012/21/102/17/114/12/11 5/17/10 7/13/10 9/2/1010/26/1012/28/102/24/114/18/11 5/18/107/8/108/25/1010/21/1012/22/102/18/114/13/11 5/19/107/14/10 9/3/1010/27/1012/29/102/25/114/19/11 5/20/107/9/108/26/1010/22/1012/23/102/22/114/14/11 5/21/107/15/10 9/10/1011/2/1012/30/102/28/114/20/11 5/24/107/16/10 9/7/1010/28/1012/31/10 3/1/11 4/21/11 5/25/107/19/10 9/13/1011/3/10 1/3/11 3/2/11 4/25/11 5/26/107/20/109/8/1010/29/10 1/4/11 3/3/11 4/26/11 5/27/107/21/109/14/1011/4/10 1/10/11 3/4/11 4/27/11 5/28/107/22/109/9/10 11/1/10 1/5/11 3/10/11 5/2/11 6/1/10 7/23/109/15/1011/10/101/11/11 3/7/11 4/28/11 6/2/10 7/26/109/16/1011/11/101/6/11 3/11/11 5/3/11 6/3/10 7/27/109/17/1011/12/101/12/11 3/8/11 4/29/11 6/4/10 7/28/109/20/1011/15/101/7/11 3/14/11 5/4/11 6/10/10 8/2/109/21/1011/16/101/13/11 3/9/11 5/5/11 6/7/10 7/29/109/22/1011/17/101/14/11 3/15/11 5/6/11 6/11/10 8/3/10 9/23/1011/18/101/18/11 3/16/11 5/9/11 6/8/10 7/30/10 9/24/1011/19/101/19/11 3/17/11 6/14/10 8/4/10 9/27/1011/22/101/20/11 3/18/11 6/9/10 8/10/1010/1/1011/29/101/26/113/21/11 6/15/10 8/5/10 9/28/1011/23/101/21/11 3/22/11 6/16/10 8/11/1010/4/1011/30/101/27/113/23/11 6/17/108/6/10 9/29/1011/24/101/24/11 3/24/11 6/18/108/12/1010/5/10 12/1/101/25/11 3/25/11 6/21/108/9/10 9/30/1011/26/10 1/28/11 3/28/11 6/22/108/13/1010/11/1012/10/102/3/11 3/29/11 6/23/108/16/1010/12/1012/13/102/4/11 3/30/11 6/24/108/17/1010/13/1012/14/102/10/114/1/11 6/25/108/18/1010/14/1012/15/102/11/11 4/6/11 6/28/10 8/27/10 11/5/10 6/29/10 8/30/10 11/8/10 6/30/10 8/31/10 11/9/10 1/31/11 3/31/11 10/6/10 12/2/10 2/1/11 4/7/11 10/7/10 12/3/10 2/2/11 4/8/11 10/8/10 12/6/10 2/7/11 12/7/10 2/8/11 12/8/10 2/9/11 12/9/10 20 Morningstar Advisor August/September 2011

Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2011

Morningstar Advisor - August/September 2011
Contents
Contributors
Letter From the Editor
Simplicity and Design Matter
Do You Use ETFs Strategically or Tactically?
The Institutional Way
How to Analyze an ETF
Eyeing ETFs’ Next Chapter
Small-Cap/Large-Cap Flip-Flop?
Four Picks for the Present
Investment Briefs
Morningstar Investment Conference
Pitfalls of Peer Groups
A REIT Recovery, With a Catch
Turning Fund Distribution on Its Head
Here Come ETF Managed Portfolios
Circle These Picks Amid the Crop of New ETFs
ETF Analyst Favorites
Beware, the Accidental Portfolio Manager
It’s the Destination, Not the Vehicle
New Growth, Rooted in Experience
Better Ways to Look at ETFs
How to Better Manage Your Clients’ Future(s)
More Bargain Than Bubble
Cheap, Local, and On a Roll
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
First-Quarter Assets Hit an All-Time High
You Say You Want a Revolution?

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