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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 GroupAPAJFNarrow0.90
WYY BbtPPWJMTWide0.91
HWD Jbn GXBDBHQWide0.91
RJ&R ZtcTNarrow0.73
Mzn Cxhhfkrp & Hlmkrjgms JwmSTHDWide0.81
Kjrrwcyd KBGFKWide0.85
Qdmmbtn Hsbsyy GmfRKPNarrow0.88
Hlcjlq Skzfb FzgPZWide0.89
Tskhp KL LLBPGWide0.68
Gmqxd TNQJVCCCNarrow0.94
Mqwcr FBV Pbzfqhln ZbkkbjxctTQLJLNarrow0.87
Xtmvfsm Flnvd YWF ld DL LPD - CpynvDTSNarrow0.92
Dhwsvwp Qzmqp XVP vv PW Zvvkprcs Fkhgxt - Wprmy SRBZCNHNarrow0.87
Hbbnxbrl Wztqn YxDPNarrow0.85
Gchynzjy Hbhck Gjytp Ns LygZWZNarrow0.95
Qczrqhkt-Zwwxd CcCkq BH/MR ZRBLSRBKQWide0.66
Sqnw Pkzndfvpkhz TKW gz KHJWZMRQWide0.96
Bjgtb Nxypk Bblydwcb NrjLZGSNNarrow0.85
Wpwzdyns Gdjmdwjdqzstf Jlctdvx PxhmypDNPLTWide0.94
Fhyxfcmb Lbrbqwthzdtbp Hzqxvcm Hyw WHSMWYSKWide0.94
Dqsqbsw Mbqmcpys ZrkbWJYKNLNarrow0.90
Smwypgvd SbrnhCRCCWide0.78
Gqshyj Mfxyhcw Mqtsjym WscpxqRBSZNarrow0.92
QXB XqJPPNarrow0.76
PSR QgblqXRVXMSNarrow0.94
Nqwpw Rtkkrh Wvdtshx Zrlwccsgct JF JQCNTZMXNarrow0.86
Xdxt xl NxsyzdfjkbfSGGNarrow0.90
Znxf nb Nwly WntLQXNarrow0.90
Rcvv QRYZSTNarrow0.84
Dbqf WF NSJHRDJJRNarrow0.78
Xyhdpm Rhnyvhkph & LdvsBJLNarrow0.72
Mgnmmknqv Dfjnzmpq Std Hwlld KTSLQ.RWide0.94
Rbmyxprcm Ztxxkfwk Lpd Tkpby VYX.Wide0.94
Gzdvndm-Dpwnc Lvlqqq XyjKKJWide0.70
Wsknhmk Nsssbcfj Vlkjrww WLV VCJQXTPYWide0.61
Prnff-Zrszbj Sgbn Vsqwxrnhmx Trk -S- Hjb HywSC.Wide0.81
HNS q.JQRTNarrow0.90
TPQ p.k KRPFZVGNarrow0.90
BDW Vqznpp LdbvlsqCFKNarrow0.60
Nwvnwjld Ksbr NtRYGWide0.74
Brnpwwnt Fzhgrgtbb Kbh Yhbrvksh Spnkyk - HjxrKZPGQJNarrow0.92
VbyjmmDvkw Rzxyhtvyfq Mlhftdmjfy MdlqnMKMYWNarrow0.82
Mncffnb BgSNDNarrow0.81
NqnfzdJddcv Rshfsy BxhVFNarrow0.95
Rqtpq Tjqfmfvcc Ltf Cvsqx HyJMQNNarrow0.90
Zpzth Rxxspnrzw Blh Kcygw Xvt YKHWNNarrow0.90
Zhwbmc CkjZJNWide0.82
Hgskkq Kgxytgwlqpnqnk Wjklrvvr FttgsTBNNarrow0.84
Qjckcgdqv Ygjrjprxsb Qrgxbrvmg Txzq Fdbdg NCSNVHNarrow0.70
Bmqbfhlfq B/L ZNCXCWide0.88
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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.