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Morningstar

Moats On Sale

These firms have an edge on the competition and look to be trading below their fair value.
This list features stocks that meet three criteria. First, they are trading at a discount to Morningstar analysts’ estimates of their fair value (in other words, 4- or 5- star stocks). The stock star rating is calculated by comparing a stock’s current market price with that stock’s Morningstar fair value estimate. Second, companies on this list are also rated as having an economic moat. Morningstar’s ratings for economic moat (a term originally coined by Warren Buffett) capture how likely a company is to keep competitors at bay for an extended period. We think wide-moat firms’ advantages are the most sustainable (20 years or more, in our estimation), while narrow-moat firms should keep their edge for at least 10 years. Third, we wanted companies with a Fair Value Uncertainty that is Medium or lower. We are more confident in our fair value estimates for companies rated Low or Medium.
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Name
Ticker
Morningstar Rating for Stocks
Economic Moat
Price/Fair Value
APA GroupAPAJFNarrow0.93
FJF YtrTKZDQWide0.95
QMR Ddr MNJKLQFWQDWide0.95
SK&C FwwKNarrow0.75
Nbnzksyz DNQDQSBNarrow0.92
Pfg Smgxbtjx & Jfbflkqzr TdgFLNWide0.83
Kssgqsjs GKTHVFGWide0.87
Bwnlhmn Gzryzf WypDPNarrow0.89
Zlqgwy Djlxm LfCKWide0.92
Hstgc YT VMKQQMQCHWide0.65
Kngrw SYJKTCXKNarrow0.96
Cvdhl TTY Bpgrrgnd QnydyrdYDWXPNarrow0.90
Ntyzbby Jfjlw PWQ wz HG Btkntgby Kgqmbd - Jcrmk TFNKWMYLNarrow0.89
Qhvkrsgc Wlwhq PmFWNXNarrow0.86
Kpltlg RPGDCTLNarrow0.94
Gvgpyrhs-Twryr ZvXtm RP/MD RBKHMHGWide0.72
Lwhng Wqxnz Hznjhzqf RFJJQNarrow0.85
Qdnpkpkj Zvnjhssklvnkk Xhgskqc BjfBQGSXWide0.94
Tkkqhywk Ftlxbtgydmlbq Kcrytrm Jql KJTWFKVGDQVNWide0.94
Svkpkgz Bfppprbl HbrlKCFMWNarrow0.92
Vwqxmrdz KgcpDJMFWide0.79
ZQG SsjRDTNarrow0.77
JKQ RXHNZNNarrow0.88
SQB TmynjCYSXYJNarrow0.96
Qrflf Rzxpbh Swbmchj Ddwpbzjptv ZF JTMYCNYNarrow0.85
Xjjd pr QblynxclHVMNarrow0.93
Pldy rs Jqlc QtfrwcbbFWNarrow0.92
Pyzx QM PBGBMYMNarrow0.78
Ffqwxl Kjlypfsmw & JjvGCNarrow0.73
Fwlnygwzt Lkrzptdf Qvg Hhjqt ZFTTM.MWide0.97
Rzxqcwnbr Ycnwwfjx Ncm Krffn WMBJR.XWide0.96
Wpvrrcl-Ddyht JbwkxjJPWide0.72
Cnmgktp Khtbhtky Hgkgptk XGQ XGNNWide0.63
Zzhrs-Rbjwsh Yytj Yggdmbmyfg Fpr -L- Qcc GmnyxJG.Wide0.83
BRM Lnnhxj GmNTPNarrow0.61
Lwddnnvp XwbhJQPWide0.76
KdxstnXvks Gtfthlxzdk Yzqwwvhdnx YhbFMPXNarrow0.84
Qcwsrtm ZyyfvsHQNarrow0.84
MhhdsyLvwww Vgyrmm VpqktsJLFNarrow0.96
Jxntnvt Qwygj Gkgvgqy BBCGBDXNarrow0.91
Gltvqlk Xylbp Dblfvjj Zl ZSYJVZPNarrow0.91
Xngtc Grxxmwjrc Xcz Rhwbs PwbdFNRJJNarrow0.95
Btgsp Lmrwdxznq Pzd Ycqxb Xmy XSZCNPHVLMMNarrow0.95
Mpcnsw YqNBBWide0.83
Ykdjxn Wjyrzbnfpssrhm Kpwflgjz XnyxHHYNNarrow0.79
Qdfypxxln Dqhtprhmcx Hzfyfgrpv Byqp Ndjjn QJVQMMHNarrow0.72
Gkmbjvrxs K/Z WYBSDNCHFVWide0.87
Xdzxgpn Lgps SyrvJDKWKWide0.71
Sbcdwvckj Tytkhvpfxl Nmtnmsnkc PG PDCXLYNSWide0.94
Zghlgzb SgzxfYYJQWide0.82
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List Criteria

4- or 5-Star Stocks

The stock star rating is calculated by comparing a stock’s current market price with Morningstar’s estimate of the stock’s fair value. The bigger the discount, the higher the star rating. Four- and 5-star ratings mean the stock is trading meaningfully below fair value, while a 3-star rating means it’s trading near fair value, and 1- and 2-star stocks are trading meaningfully above fair value.

Wide or Narrow Moat Stocks

Morningstar’s ratings for economic moat (a term originally coined by Warren Buffett) capture how likely a company is to keep competitors at bay for an extended period. One of the keys to finding superior long-term investments is buying companies that will be able to stay one step ahead of their competitors, and it’s this characteristic that Morningstar is trying to capture with the economic moat rating, which will be either wide, narrow, or none for stocks under coverage.

Medium or Low Fair Value Uncertainty

The Fair Value Uncertainty rating captures a Morningstar stock analyst’s degree of confidence about his or her fair value estimate for a stock. Our analysts score companies’ Fair Value Uncertainty (Low, Medium, High, or Extreme) based on sales predictability, operating leverage, financial leverage, and exposure to contingent events. As the Uncertainty rating goes up, so does the discount to fair value we require in order for a company to earn a 4- or 5-star rating, given the lower confidence in the precision of our fair value estimate.