Northern Trust Corp (NASDAQ:NTRS)

CAPS Rating: 3 out of 5

The Company is a provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions, and affluent individuals.


Player Avatar paek813 (99.69) Submitted: 1/23/2013 4:38:20 PM : Outperform Start Price: $50.33 NTRS Score: +4.01

As of 12/31/2012 NTRS is a second largest component (out of 20) of the Morningstar's Wide Moat ETF (ticker: MOAT).
MOAT seeks to track the price performance of the underlying holdings in the Wide Moat Focus Index. The Wide Moat Focus Index is a rules-based, equal-weighted index intended to offer exposure to the 20 most attractively priced companies with sustainable competitive advantages according to Morningstar's equity research team. The top 10 holdings as of as of 12/31/2012 include:
3 JW.A
6 BK
9 WU
10 STJ
More information on the MOAT ETF can be found here:
According to XTF (as of 1/22/2013) NTRS is no longer in the top 10, presumably because of the recent drop in price. Alternatively, it could have been replaced with something deemed a better value.

S&P valuation of Northern Trust Corp (NTRS)
"Analysis of the stock's current worth, based on S&P's proprietary quantitative model suggests that NTRS is slightly undervalued by $5.75 or 11.4%." (based on price of $50.25 and fair value of $56.00)

About Economic Moats:

Pat Dorsey is the author of "The Little Book That Builds Wealth," a book almost entirely about what makes an Economic Moat and its durability over time.

In the video below, Pat Dorsey, concisely outlines the major competitive advantages that give superior companies the power to stay on top. Customer Switching Costs are discussed @ 2:20 - a type of an Economic Moat that is often related to banking services.

This is a similar, longer video by Morningstar's Paul Larson where he outlines the five sources of wide economic moats, research team's moat-rating process, and the performance of the Morningstar Wide Moat Focus Index:

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