The transcript provided is a summary of a podcast episode from Morningstar, a financial research firm. The episode features a discussion between Dave Sakura, Morningstar's U.S. market strategist, and Susan. They discuss various stocks and economic metrics, focusing on the healthcare sector.
The episode begins with Sakura discussing the economic outlook for the week, stating that there are not many metrics coming out and the earnings point of view should be quiet. He mentions watching the core PCE later in the week, but based on the FED commentary last week, he thinks it's probably going to be in line with expectations.
Sakura then discusses two companies that Morningstar thinks may be of interest to viewers: Nike and Costco. He explains that Nike is significantly undervalued and provides a detailed analysis of its stock performance and future outlook. Sakura also discusses Costco, which he thinks is overvalued, and provides a detailed analysis of its stock performance and future outlook.
The episode then shifts to a discussion of Managed Care Organizations (MCOs), highlighting research from Morningstar's Healthcare team. Sakura explains what MCOs are and provides examples of larger publicly traded MCO stocks. He discusses the competitiveness of the MCO industry and whether some of the MCOs have built competitive advantages.
Sakura also provides Morningstar's investment case for MCOs, stating that while these stocks look cheap, there may not be a hard catalyst for these stocks and it may take time for investors to become more comfortable with the business models and fundamentals.
Finally, Sakura provides picks for the week, focusing on five undervalued stocks from the healthcare sector. He discusses each stock in detail, providing analysis and outlook for each one.
In summary, this episode is a detailed discussion of various stocks and economic metrics, with a particular focus on the healthcare sector.
1. The text discusses a segment on Morningstar, where the host, Dave Sakura, sits down with Morningstar Research Services chief U.S market strategist to discuss market trends and stock picks or pans for the week ahead.
2. Sakura mentions that there's not a lot happening from an economic point of view, but there are a few companies reporting that may be of interest to viewers.
3. One of the companies discussed is Nike, which Morningstar thinks is significantly undervalued. The stock is currently rated four stars and trades at a 33% discount to fair value.
4. Another company discussed is Costco, which Morningstar thinks is quite a bit overvalued. The stock is currently rated two stars and trades at a 24% premium to fair value.
5. The text also discusses new research from Morningstar's Healthcare team focusing on the investment opportunity around Managed Care Organizations (MCOs).
6. The host explains that MCOs are healthcare insurance companies, and the largest include names like United Health, Elevance (formerly known as Anthem), and Humana.
7. The text mentions that MCOs have expanded into different areas, such as having their own Pharmacy Benefit Manager (PBM) programs or PBMs, and directly into Health Care Services themselves.
8. The host also mentions that there's a lot of concern about how changes in politics could negatively impact the industry.
9. The text discusses the stocks of CVS Health and Centene, which are currently undervalued and are expected to recover.
10. The host also mentions Baxter International and ICU Medical, which are smaller companies in the medical device and instrument industry.
11. The host mentions Agilent Technologies, a company that has a wide economic moat based on its intellectual property and spending on R&D.