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Morningstar Classroom: Apple, Tesla, Amazon--Overvalued?

Whether you’re new to investing in stocks, a seasoned stock picker looking to add new screens to your stock-picking process, or simply interested in discovering new stock ideas – this session is for you.

This event streamed Tuesday, May 25, 2021.

Dave Sekera:
Welcome to the Morningstar Classroom. My name is Dave Sekera, and I'm the chief U.S. market strategist here at Morningstar Research Services. Joining me today is Karen Wallace, director of investor education for Morningstar. First, I'm going to start off walking you through Morningstar's equity research, valuation methodology, and then I'm going to talk to a couple of equity analysts about the stocks that they cover, and specifically take a look at one stock that we think is overvalued one that's undervalued, and one that's fairly valued and how they use that investment thesis within our methodology in order to derive their fair value, then I'll turn it over to Karen. Karen will walk you through some of the tools and screening capabilities on in order to help you surface new investment ideas. And then finally, I'll wrap up the presentation by talking about where we think the market valuation is today and help provide you some ideas as far as what we think is undervalued and overvalued in today's market.
Dave Sekera:
So first let me just provide a little bit of background about Morningstar. So Morningstar is one of the largest global independent providers of financial research and data, and we strive to be as transparent as possible with our products in order to be able to provide investors, everything that we think that they need to know to be able to make informed investor decisions and help empower them to make the best investments for their specific situations. And finally, we're not traders here at Morningstar. We believe in investing for the longterm. We find that the best investment outcomes are those investors that take actions investing for the longterm as opposed to trading. So taking a look at Morningstar's equity research group, we have over 120 analysts located globally, and those analysts cover over 1500 stocks across the world. Now all of that is covered by one overarching methodology.
Dave Sekera:
And so we're consistent in how we take a look at stocks, no matter where those stocks or those companies are located. Now, taking a look at our coverage. We do have stocks in each of these different areas. Again, we cover over 1500 companies and here in the United States, we cover about 700 companies domestically. But then when you include the ADR, is that trade for foreign stocks on us exchanges. We cover about 800 companies. We do cover the gamut from large cap, mid cap, small cap, and we do cover all of the main sectors. Now, again, part of our job here is to make sure that we don't get caught up in the short term market fluctuations, but really get past that and look into and delve into what we think the value of a stock is. So for example, there are multitude of different things that impact stock prices in the short term.

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