Morningstar Advisor - February/March 2012 - (Page 20)

Investments à la Carte Four Picks for the Present Stock: Ford F Fair Value Estimate $23 Morningstar Rating Uncertainty High Economic Moat None Credit Rating BBB– Market Cap $39.9 billion QQQQQ YTD Stock Price Compared With Fair Value Estimate Daily stock price Fair value estimate 30 20 10 (Gaps indicate when fair value estimate was under review.) 1/10/11 4/10/11 7/10/11 10/10/11 Ford Motor Co.’s products, marketing, and union contract should position the automaker to compete better than in the past. Still, it will take time for the company to regain market share in the United States. Ford continues to increase its consideration in the United States, mostly because it did not take government loans and is making better cars. In 2010, Ford picked up nearly 0.9 percentage points of market share. Another key change is building more Ford models on common platforms, which will improve economies of scale. By middecade, Ford expects that 75% of its global production, or 6 million vehicles, will come from five vehicle architectures. This move will also allow Ford to switch production faster to meet changing demand while also cutting costs via better economies of scale. Dave Whiston 30 5/10/10 9/10/10 1/10/11 Mutual Fund: Weitz Value WVALX Category 1 Large Value Asset Allocation Cash US Stock Non US Stock Bond Other 20 Morningstar Rating Investment Style 4 Large Blend QQQ Total Assets $946.3 million Expenses 1.21% Turnover 42.0% 10 –100 –50 0 50 100 Wally Weitz made a name for himself investing in cheap, distressed fare and later suffered for that strategy at times in the 2000s. He has lately toned things down, requiring a bigger margin of safety for troubled firms and scooping up more-established firms at sizable discounts to their prospects. Indeed, the fund recently owned just one major bank (Wells Fargo WFC) and has made a once0 1/10/113/1/114/18/116/6/117/22/119/13/1111/ 1/11/113/3/114/19/116/10/118/1/119/16/1111 1/12/113/4/114/20/116/13/118/2/119/19/1111 1/14/113/10/11 5/2/116/17/118/4/119/21/1111 1/18/113/7/114/21/116/14/118/3/119/20/11 11 1/19/113/11/11 5/3/116/20/118/10/119/30/11 1/20/113/14/11 5/4/116/21/118/11/1110/3/11 1/21/113/15/11 5/10/116/30/118/22/1110/17/ 1/24/113/16/115/5/116/22/118/12/1110/4/11 1/25/113/17/115/11/11 7/1/118/18/1110/13/1 1/26/113/18/115/6/116/23/118/15/1110/10/1 1/27/113/21/115/12/11 7/5/118/19/1110/14/ 1/28/113/22/115/9/116/24/118/16/1110/11/1 1/31/113/23/115/13/11 7/11/118/30/1110/25 2/1/11 3/24/115/16/117/6/118/23/1110/18/ 2/2/11 3/25/115/17/117/12/118/31/1110/26 2/3/11 3/28/115/18/117/7/118/24/1110/19/ 2/4/11 3/29/115/19/117/13/11 9/2/1110/27 2/10/114/1/115/20/117/8/118/25/1110/20 2/7/11 3/30/115/23/117/14/11 9/6/1110/2 2/11/114/4/115/24/117/15/11 9/12/1111/1 2/8/11 3/31/115/25/117/18/11 9/7/1110/3 2/14/114/5/11 5/26/117/20/119/8/11 1 2/9/11 4/11/116/1/117/21/119/9/11 2/15/114/6/11 5/27/11 7/25/119/15/11 2/16/114/12/11 6/3/11 7/27/11 9/22/11 2/17/114/7/11 5/31/11 7/28/11 9/23/11 2/18/114/13/11 6/7/11 7/29/11 9/26/11 2/22/114/8/11 6/8/11 8/5/11 9/27/11 2/23/114/14/11 6/15/11 8/8/11 9/28/11 2/24/11 4/26/116/16/11 8/9/11 9/29/11 2/25/11 4/27/11 6/27/118/17/1110/12/1 2/28/11 4/28/11 6/28/11 8/26/1110/24 3/8/11 4/29/11 6/29/11 8/29/11 3/9/11 10/5/11 10/6/11 10/7/11 unimaginable foray into the1/13/113/2/114/15/116/2/117/19/119/1/1110/211 technology4/25/116/9/117/26/119/14/1111/ sector. These moves have paid off nicely of late, and Weitz’s long-term record is still stellar. A greater reliance on sturdy fare and a longstanding double-digit cash position should serve investors well if markets remain rocky. Greg Carlson Separate Account: Jennison Large Cap Growth Equity Category 7 Large Growth Asset Allocation Cash US Stock Non US Stock Bond Other Total Number of Holdings 73 Morningstar Rating QQQQ P/B Ratio 4.46 Assets in Top 10 Holdings 27.93% Average Turnover Ratio 65% –100 –50 0 50 100 This is one of the most-dependable largegrowth strategies around. Sig Segalas, who’s managed this account for decades (he also has run Harbor Capital Appreciation HACAX since its 1990 inception), and his team seek out firms that are relatively stable and have strong earnings growth prospects, yet aren’t too pricey. It’s a balancing act, but they’ve pulled it off quite well on a consistent basis: They’ve outperformed most of its large-growth peers in most types of markets, and patches of weak returns have been short-lived. And the team’s recent heavy emphasis on quality businesses paid off in turbulent 2011. Greg Carlson 20 Morningstar Advisor February/March 2012

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2012

Morningstar Advisor - February/March 2012
Letter From the Editor
Make a Difference Stories, Not Debates
How Concerned Are You About Europe?
Analytical and Independent
What to Ask When a Fund Manager Leaves
Past, Present, Future
Have Financials Gotten Cheap Enough?
Four Picks for the Present
Investment Briefs
Tactical Funds Miss Their Chance
Specialty Retail: Ad Hoc Opportunity
How Europe Is Making Its Crisis Worse
Impact on U.S. Economy Will Be Minimal
European Banks: Bargains or Value Traps?
Don’t Count the Euro Out Yet
Europe on the Brink
GoodHaven Realizes Its Vision
How Index Trading Increases Market Vulnerability
Nonlisted REITS: Handle With Care
Safety Picks for the Many Moods of Mr. Market
On the Prowl for Large- Blend Index-Beaters
Our Favorite Mutual Funds
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
The Math That Matters

Morningstar Advisor - February/March 2012