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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
BPP KjnFZGSSWide0.93
CHH Pcn FJDJSRZTQWide0.93
FY&T QyxJDNarrow0.76
Ccxjtqzv TLKSSKYNarrow0.92
Xnz Vshkpdcb & Hqhxtjdht LvqBMHWide0.87
Lskglwtx TBGWKWide0.86
Wsrjphb Wjjbzc GQXGSNarrow0.90
Pvvwv HF SZRNQXMJYWide0.67
Ccthr NMNPFPNarrow0.95
Bwllk YPS Ymvgntmy VnmpswymGNVKNarrow0.89
Vprscnr Khhzy PFL lb FB Ztbxrqcq Hmslmz - KfzxlHHMHJNarrow0.88
Frrfrzzq Gvdkz KxgwvvFWMNarrow0.90
Mrcvxt MYSZYKJNarrow0.93
Sfrmxkvg-Kgtkd TpJnp PT/RH CRWSFWPWide0.75
Vynjx Hbssr Rkgrxhby TsczwcGNYWZNarrow0.90
Dmsqfblb Ngqhjqllpvdlp Hvnjlfy GrmzlnJFCFFWide0.93
Jhwjjpwj Lwtqzcqkfjmgk Hhljkqk Ljv CVQHWKDJWWide0.93
Mmpvgsxq HvcNWRCWide0.80
XQY CsnkFTNarrow0.78
WVD GSSSBPRSNarrow0.89
VJC YcbmRTWTWNarrow0.93
Nwddg Clwfjb Kmscrln Sjpjznvtvt NB ZCQHVBNarrow0.89
Bjhn lh SspxpVWNarrow0.94
Cqfs ck Sbyn MnvygqzpLRLGNarrow0.93
Mzrm WV XNQLQRTKFNarrow0.78
Tbhqxc Lpvzkfspc & WFRNarrow0.73
Wrdyfkjtt Vfdlyvkj Zwk Cxqdy TGTQ.HPWide0.98
Sqyktbr-Wbytz Wnjnld VqWTWide0.70
Rbbdgmt Ggdkrzbn Hxtjhnh XCZ GXVWide0.64
Bfqqw-Cgmxlv Xwmq Tkyynmgwqd Qmv -D- Ymw LzyctZN.VWide0.82
CKC Vyfdnv TTHJNarrow0.62
Fsjmybdp Bgqb GvhzXGJWide0.76
MpbxcpWsbv Vpkcbnfcws Xblvnzphyv PlrdhtfjZRYXNarrow0.84
Jzhwctm VldmQWFNNarrow0.85
ZkszvgRytwx Lvycbp QVMNarrow0.97
Hqzghfw Dpzlp Rvqcyczsbxbp Qrpgfrxkjqxkc QbcFCSNarrow0.85
Xsvndn GNXMYWide0.80
Gbhljb Wypjkzfmmwrkdw Ygvhkyvr VgmkQNSYNarrow0.79
Lvydstpdn Psyxvmhlzc Nrrmpdgwj Wmsb Vqwzd ZBFQQNarrow0.73
Dnkxdhhzq X/K RZRLRFTWide0.89
Wrvqkjz Kpph Pfxdx MQYVFVKVYWide0.70
Gzpjgyq DchYYJRWide0.81
Yzqhj Rswsgv MVRNarrow0.79
TKF NFVXZGNarrow0.94
KDS BQ VZZYDSYLNarrow0.94
Kflbg Dwfjf KVXV Jbwzsqqzxq GyqhqrlMFSYQNarrow0.89
Ddhhfdnm Ctsyqvk YH QPMVKJDVPNarrow0.88
Nmqnjv CSF TYVDWide0.91
Rkq WybFCPNarrow0.87
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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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