Small-Cap Superstars

Our Latest Article Highlights A New 5-Star Pick!!

JohnOwens — Thu, 28 Aug 2008 13:51:37 GMT

Click here to read our latest article, which includes a new pick from our Small-Cap Superstars as well as an update on the performance of our previous picks:

http://news.morningstar.com/articlenet/article.aspx?id=246523&pgid=hparticle

As always, please feel free to use this blog to share your thoughts or to ask questions about our Small-Cap Superstars' stock picks.

Navigant Consulting Still Has More Upside

JohnOwens — Thu, 07 Aug 2008 19:53:33 GMT

Morningstar's Small-Cap Superstars featured Navigant Consulting (a firm that specializes in litigation) as a pick in early October 2007, when the stock was trading below $14. The shares are now above $17 and Senior Stock Analyst Brett Horn remains bullish on the company's stock, with a $24 fair value estimate.

Navigant recently reported second-quarter results. Overall, Horn believes the company delivered a solid performance, led by strength in its litigation business, which is capitalizing on the subprime fiasco. On the other hand, its business consulting segment did not fare as well, reflecting softness in discretionary projects for the financial industry. Horn noted that consulting business is lumpy and event-driven and results can swing markedly from quarter to quarter. He says that a weakening economy will hurt some aspects of Navigant's business and help others and will most likely result in something close to a wash. He remains comfortable with his projections

To read Horn's note on Navigant's second quarter results, click on the link below:

http://quicktake.morningstar.com/stocknet/san.aspx?id=247697

Consider taking profits in UCBH?

JohnOwens — Thu, 07 Aug 2008 19:07:58 GMT

Morningstar's Small-Cap Superstars featured UCBH (a San Francisco-based bank that focuses on the ethnic Chinese population in the United States and abroad) as a pick on July 1, 2008, when the stock was trading around $2.30. Since then the company's shares have more than doubled. Morningstar, however, has now taken a more cautious view on the stock, by increasing our fair value uncertainty rating to extreme (which effectively pegs our rating on the stock to three stars) and by lowering our moat rating on the stock from narrow to none. This reflects our concerns about the magnitude of the bank's credit problems. Nevertheless, after reviewing the company's recently reported second-quarter results, Senior Stock Analyst Michael Kon maintained his $7 fair value estimate. We'd also note that several of our Small-Cap Superstar fund managers continue to hold UCBH's shares.

To read Kon's latest note on UCBH, click on the link below:

http://quicktake.morningstar.com/stocknet/san.aspx?id=246826

A New Pick from Our Small-Cap Superstars

JohnOwens — Wed, 30 Jul 2008 19:20:37 GMT

Click here to read our latest article, which includes a new pick from our Small-Cap Superstars as well as an update on the performance of our previous picks:

http://news.morningstar.com/articlenet/article.aspx?id=246523&pgid=hparticle

As always, please feel free to use this blog to share your thoughts or to ask questions about our Small-Cap Superstars' stock picks.

Still Bullish on Carter's

JohnOwens — Mon, 28 Jul 2008 18:24:01 GMT

Morningstar's Small-Cap Superstars featured Carter's (a leading children's apparel manufacturer and retailer) as a pick in early October 2007, when the stock was trading around $20. Since then, the company's shares have shed about four bucks and stock analyst Michelle Chang trimmed her fair value estimate. Nevertheless, Chang still believes the stock is significantly undervalued. We'd also note that several of our Small-Cap Superstar fund managers continue to hold shares of this company.

Last week, Carter's reported decent second-quarter results in a rather difficult retail environment. Stock analyst Michelle Chang was especially impressed with the 17.3% same-store sales growth at Carter's brand retail stores. She also thinks Carter's sales to wholesale customers (comprised mostly of department stores) held up rather well, especially considering that many retailers are cutting back on inventory and purchase quantities. Carter's mass channel business, however, struggled, due to disappointing performance at Wal-Mart. The struggling OshKosh made some progress, but still has a long ways to go in its turnaround. The company's profitability declined modestly. Chang remains comfortable with her current-year and long-term assumptions, which are slightly below management's projections.

To read Chang's note on Carter's second quarter results, click on the link below:

http://quicktake.morningstar.com/stocknet/san.aspx?id=245756

International Speedway's 2Q Results

JohnOwens — Wed, 09 Jul 2008 21:03:59 GMT

Morningstar's Small-Cap Superstars featured International Speedway (a leading promoter of motor sports in the U.S.) as a pick in late October 2007, when the stock was trading around $44. Since then, the company's shares have shed about six bucks.

Today, International Speedway reported weak second-quarter results, which were in line with Morningstar analyst Joel Bloomer's expectations. Bloomer, however, lowered his forecast for the rest of the year and for 2009, due to the continued pressures on the U.S. consumer. This resulted in a small decrease in his fair value estimate for the stock. Bloomer does not expect the headwinds currently facing the business to persist forever and believes that the shares remain significantly undervalued. I'd also note that several of our Small-Cap Superstar fund managers continue to hold shares of this wide-moat company.

To read Bloomer's note on International Speedway's second quarter results, click on the link below:

http://quicktake.morningstar.com/Stocknet/san.aspx?id=243782

Welcome!

JohnOwens — Tue, 01 Jul 2008 21:51:38 GMT

Welcome to Morningstar's Small-Cap Superstars blog, which will feature articles and commentary highlighting five-star stocks held by some of our favorite small-cap fund managers. This blog will also provide you with a forum to share your thoughts on these stocks as well as to ask questions.

Click here to read our latest article, which includes two new picks from our Small-Cap Superstars as well as an update on the performance of our previous picks:

http://news.morningstar.com/articlenet/article.aspx?id=242974