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Technical Analysis

Fundamental Analysis - Morningstar

by Ivano Celia, on May 12, 2020 10:00:00 AM

There are many different approaches for a structured financial analysis to interpret trading signals, trading ideas and the right trading momentum. In this article series I would like to focus on 3 modern and efficient financial analyses from independent providers:

What do these 3 financial analysis sources cover in actuality?

Characteristic Fundamental Technical Momentum
Validity Medium to long-term

Intraday (Day Trading)

Medium to long-term
Search Type Equity research Multi Asset Classes (FX, stocks, commodities) Equity research
Output
  • Valuation of shares
  • Estimate Fair Value
  • Trading Signals
  • Technical Analysis
  • Market Commentary
  • Valuation A, B, C, D

 

In this article I will focus on Morningstar's fundamental analysis and in the following two articles I will examine technical analysis and momentum.


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Fundamental Analysis - How much is a stock really worth?

Morningstar Star Rating Fundamental Analysis

Image from original video of Morningstar's shares rating

 

As an authority in the financial industry, Morningstar is widely used by most banks and institutional investors. The best known and most popular features of Morningstar is their Star Rating. The star rating is based on a maximum of 5 stars - as known from the hospitality industry. Its purpose is to help traders discover thereby shares/companies, which show a genuine undervaluation. The whole stock exchange noise is faded out completely and 3 factors for the evaluation of a enterprise/share are brought to the forefront:

  1. Current shares Price
  2. Morningstars Fair Value (also called Fair Price) Assessment
  3. Unity factor of fair value

Morningstar Fair Value

Image from original video of Morningstars shares rating

 

The higher the discount between fair value and current stock price, the higher the star rating of Morningstar.

  • 4 - 5 stars mean that the share is undervalued
  • 3 stars indicate that the share is fairly valued
  • 1 - 2 stars indicate that the share is overvalued

Morningstar is integrated for free into a Swiss trading platform.

Swiss Bank has integrated Morningstar into its trading platform free of charge. Read more about it below in this blog article.

 

For investors, 5 star shares usually represent the better opportunity than a 1 star share. The Morningstar Star rating can therefore be used by investors to evaluate the real value of a stock and trade accordingly.

Morningstar's Fundamental Analysis is a tool normally not available to bank advisors and professional investors/traders. For a fee, private investors/traders also have the option of paying an annual subscription to Morningstar. A single Swiss bank has integrated Morningstar into its trading platform free of charge. Open a free demo account now and try it out for yourself.


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Morningstar was founded in 1984 in Chicago, has an annual turnover of over 1 billion USD and is itself listed on the NASDAQ as a financial information and analysis company (MORN). Morningstar analyzes 500,000 equities, mutual funds and other securities. Watch the Morningstar Stock Rating Video.

 

Others also searched Google for

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  • Yahoo!
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  • MSCI
  • AOL
  • FactSet Research Systems
  • Amazon
  • TradingView
Topic:Trading SignalsActive TradingInvestment StrategyMorningstarAnalysis and StrategyFundamental Analysisvalue shares
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About this blog

trading-boerse.ch is a personal finance blog. The articles posted provide relevant trading information, aspects, and opinions from expert professional traders and data and analytics providers.

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