What exit opportunities would an Analyst from an independent sell-side equity research firm, like Morningstar, have?
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Morningstar has a very unique research methodology that really fits long-only investment philosophies quite nicely for the most part. I have seen former Mstar analysts at shops I respect on the long-only side. I don't think the fit would be as good for a hedge fund vs coming from a BB with a more quarter to quarter focus.
A little more on Morningstar from my perspective as a consumer of their research: I always read their work, especially as it pertains to moats and stewardship. It's truly differentiated vs the street and the typical sell side shop. Their models are also quite detailed and they have the right idea, but then they ruin them by using a 4% RF rate haha. As a result, all of their actual fundamental estimates are biased higher because the analysts have to overcome that nonsensical RF rate, else every single company would come out massively overvalued. I've talked to the guy responsible for that particular input (it is a house input) and supposedly they are looking into changing it.
Overall I think it would be a solid place to start out and you'll get good exposure to the things you'd think about at a long only, but less relevant if your end goal is hedge fund or a shop with a shorter-term focus.
What is a RF rate?
Risk free rate, the base of the cost of capital. Morningstar uses an arbitrary cost of capital methodology in their valuations and a poor rf rate underpins it
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