Course 402: Morningstar's Stock Types
So You Want to Build a Portfolio?
In this course
1 Introduction
2 Let's Make a Distinction
3 So You Want to Build a Portfolio?
4 I Own What?

The Morningstar stock types do more than just summarize a lot of financial data in order to give a bird's eye view of a company. They are tools to help analyze a stock portfolio and to see how diversified it is across different types of businesses. Over the next eight lessons, we will take a look at a well-known company in each of the stock types. Here's a quick overview of these very different companies. Speculative Growth: Yahoo YHOO. The premier Internet portal has become one of the giants of the online world, with an audience in the tens of millions. It has become consistently profitable, unlike most of its online brethren, but its track record is still so short that it is definitely risky. Aggressive Growth: Starbucks SBUX. The coffee chain has grown like gangbusters while also showing a healthy profit, the two most important characteristics of an aggressive growth stock. Classic Growth: McDonalds MCD. The fast-food giant is a stereotypical classic growth stock: A well-known name with an established track record. It's growing steadily, but not as fast as speculative growth or aggressive growth companies. Slow Growth: Procter & Gamble PG. The consumer-products giant is a good example of this type; its growth is slower than that of even classic-growth companies, but it makes up for this lack of growth with high profitability. High Yield: Philip Morris MO. The food and tobacco giant's stock was hammered in 1999, but the company still gives back much of its enormous cash flow to shareholders in the form of a hefty dividend. Cyclicals. United Technologies UTX. This industrial conglomerate is a great example of a cyclical stock. Its businesses--aerospace equipment, air conditioners, and elevators--are highly sensitive to the performance of the general economy. Hard Assets. Barrick Gold ABX. This company is one of the most consistently profitable gold-mining stocks, but it also illustrates many of the characteristics unique to companies that sell hard assets such as minerals or oil. Distressed. Silicon Graphics SGI. This maker of computer workstations and server systems was once a hot technology stock, but it has suffered through a lot of problems since the mid-1990s and has seen its stock price tank.

Next: I Own What? >>

Print Lesson |Feedback | Digg! digg it
Learn how to invest like a pro with Morningstar’s Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.
Copyright 2015 Morningstar, Inc. All rights reserved. Please read our Privacy Policy.
If you have questions or comments please contact Morningstar.