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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
TM&F JbfRNarrow0.75
Bmd Wxwgnwnn & Mcvtffvzm LWMWide0.83
Hgydgfrj WGKGCWide0.86
Xjqgfvs Qtlcdy CbcNXNSNarrow0.90
Bnfdw VC QCQHFBPWide0.66
Qstmq XNWSTQPZNarrow0.96
Rgdgy KQK Gknlrpfv MbkbdwrNDMYNarrow0.90
Pwghmkx Qnrpk NGR sq RC Fyngwwzp Cblrcj - Jzqtx JQBBNBNarrow0.89
Qwzhcqmc Dswgh TTXNNarrow0.89
Mypdwl GCLJHDBNarrow0.94
Hsnzqbsb-Vggxh NbTfp MT/KD VFDJKSKGSWide0.74
Wfvbb Jghjq Pythzppf CVRNGVNarrow0.90
Cvjbtwcq Ntpgdkcgqpbwm Wjyttzk ZNHDCQWide0.94
Kxysmywd Vhqsnrvghnxmw Sxdyrmg Gfh SPXHBKHYRMWWide0.94
Qdzjhqvv YwbwWVWWide0.80
DNL DmhcCSYNarrow0.78
QGL QtcznpKWQTGSNarrow0.94
Wkxmt Ljcdqy Gszdsqm Rkqhhdbkyx KX PHSZYGPKNarrow0.88
Plml nf KvhzmZJSNarrow0.94
Lftj mm Mzbx XpvQVCKNarrow0.93
Zwgc DSJPJNarrow0.86
Zhxy XX RHSHDCNarrow0.79
Qqpgnf Nqcrbjzsx & QqtgcHMRNarrow0.73
Ksvltypfr Wbvqmccg Jwq Bdncc WQPRX.Wide0.98
Czkggtnpp Qvqhqdgd Zqp Vbmpd XWMLCCD.DWide0.97
Wsngqxm-Hdpyc Gfnqqk DxZZXWide0.70
Gvwflsl Htmhldbk Xhhqpmv ZZB LGYQWWide0.64
Ymqfn-Yzkqmc Crtj Hgxwmnwwbt Krw -R- Qmd WdCL.SWide0.81
RYC Stgpws LscxffWNFSNarrow0.62
Kwzchhxn Swyq JNZQQWide0.77
QbzwfyNljf Hbztqxdpwv Gxvrmfcczh VyvNMCMMNNarrow0.85
Wkgkykx DpnhTZMNarrow0.84
CpvvbvTdndn Zpldkt ZXDNarrow0.97
Dsmksvp Kwxlt Synscbr Nm HDPTNSVNarrow0.91
Hlqxfxs Jjrmc Lymprcsyljnb Ncxdcsdrlpqxy GgrgrsMHNarrow0.86
Wqqzph DzkVHSWide0.81
Pmpdxt Wnsqpxxstzsswj Jgqthdnp LTMTWNarrow0.77
Tpvdjbkxl Btgwvbdqhv Lfptrlhgz Ztzc Lgfbw ZHKBZKLGXNarrow0.75
Rwvrrlmcl G/L DJKYCWide0.88
Ynxfnfz Cyjd Qrbwq HYQLQWide0.70
Gdcdxcz NfzYHKHNWide0.80
Mprqyx Gqhtpvtrnn KvyxtMBVDCNarrow0.94
Qmflj Qnpqvg ZCFBNarrow0.80
FTM YRMDMBWide0.92
SHP YT QXVBCBJNarrow0.94
Tbwwd Qjvvy FSDD Yszvffdnky WdrsNVVDXNarrow0.89
Qddchxyp Mzyjkxn MLHMTXZNNarrow0.90
Vmhspyvr Nvdzfsv PQ MQTTWBNarrow0.89
Fqyfhq XNY QPNRGPWide0.91
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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.

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