Morningstar Credibility

[McGyro]

For some time I have been using Morningstar valuations and commentaries as an aid to making buy/sell decisions. I use Morningstar for convenience because they appear in the ASB securities trading website. However some of their valuations appear questionable. QBE for example; they have been pushing it for ages. I hung on to TME on their recommendation ( and mistakenly believing nobody could stuff up a virtual monopoly position with assured cashflow) and am beginning to regret it. Also there has been the odd swipe taken at Morningstar in investment forums.
Does anyone have any views on Morningstar compared to the alternatives?

[Harvey Specter]

I dont think anyone here trusts Morningstar. They are constantly wrong. Their reports are good for info but not for recommendations.

Some fo the other brokerages produce good reports but their fees are alot higher than ASB - you get what you pay for?

[Okebw]

Not that I'm condoning it, but I did trade through Craigs before switching to ASB for the lower brokerage/faster transactions.
But Craigs doesn't disable you're account when you stop using them so you still have access to their research.

[percy]

I think it is very dangerous to rely on brokers' valuations.
Most very well run companies: AIA,EBO,POT,RYM and all the Aussie banks, have had broker sell recommendations at different times over the years,and yet they keep on performing.
One broker used to have a different "our preferred bank" every 4 months.There were 4 banks.!!
Brokers' research is usually of a high standard,however it is your money,so you are best to use your own judgement.
Buying/selling the broker gets paid either way.The more you buy/sell the more they earn.So it is in their interest to say "I think you are best to sell X bank as our preferred bank is Y bank." !!!! lol with you paying!!!
I was in Dunedin this week.Went past broker Forsyth Barr's high rise building.Would not look out of place in Auckland or Sydney.All I could think is "God they must have charged a lot of fees."!!!!

[tenzing]

Even the basic data on at least some of the Morningstar reports appear to have discrepancies to the official financial statements, so it would pay to verify the numbers before making any decisions on them.

I'm fairly new to reading financial statements, and I'd be happy to be corrected on this, but from what I can tell, in the latest FPH-NZ Morningstar report from ASB securities:

The 03-2011 EPS(c) states 11.94 when it's 9.8 on the official report (see F-P-Annual-Report-2013-Full.pdf, p41), this skews the PE ratio which would have been correct at 26.30 with a close price of $3.14 on 2011-03-31 assuming that the EPS was really 11.94, but with an EPS of 9.8 the PE ratio should be 32.04 (3.14/0.098).

The 03-2006 Operating Revenue $m states 349 when it's 343 on the official FPH report and the EPS(c) states 11.0 when it's 9.6 on the official report (see 2011_Annual_-Report_Web-PDF.pdf, p34-35)