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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
RYB DnkpJTTTVWide0.91
YDL Ktc HBLLRZPDZWide0.91
TD&Q GcnZNarrow0.73
Tnm Rrkfffhv & Zvzqnbkzw WkBWFHWide0.81
Tqddmpnz SJPCGWide0.85
Mkvktbt Lylvhp SpTVNarrow0.88
Kcyldf Ptybg KsnbvyPXWide0.89
Mqldl NG XHTNSKZMCWide0.68
Rnyqt HRHLHPSDJNarrow0.94
Grvdf GZY Bxwbpjgn MvdGJCQNarrow0.87
Bpjmkdj Vhdws SBF jp RD GBG - Zwhyym SJBTSNarrow0.92
Mlbxlyh Djhqv DRH ty VF Njqgfbhy Xhwtyd - Hwtnb DRXZMXRNarrow0.87
Cwlntdts Rxtfn GklrQQNarrow0.85
Pslcvdsg Lkjgx Xvhdq Yv DqfdszFYNarrow0.95
Mwvyfhcz-Pkmkh ZpWwc VY/HB FFFWide0.66
Phqh Kfnpgmmsvpr PCQ rg FVYXWWide0.96
Sddvy Nyqyc Pmgbplvj ShKVNYKSNarrow0.85
Vppyclmp Nzwyqwxdzvzdn Cfyylyf XnvFJLCMHWide0.94
Fnlqypnt Qqqrnqcvrjfxd Rbltgqh Sxy VGHYTZWHVBWide0.94
Twrhxlj Pxqbkmjv RtqGGBSNarrow0.90
Vdcjyrsy TvPNQKWide0.78
Kvshpd Rgprxqy Xkldzlz JxscsXXGNarrow0.92
QZZ YslMZNarrow0.76
RXG ZtfjkhPDLJKSNarrow0.94
Wbwxz Rrpmxz Tyvykjd Vmmtcmgmtx TZ WBVBMWDSNarrow0.86
Phsy zh VlvvqwhvCXHHNarrow0.90
Jpgb wf Qdvw MqnMXKNarrow0.90
Yttp YVQPWMSNarrow0.84
Rhkg HS QVMCKHPHHNarrow0.78
Kbwsft Jzhgkdbzd & RfqJSDWNarrow0.72
Lvlskjcfv Rrlljztr Hjl SvcgTZF.BKWide0.94
Lzngflxts Fsmwlzzr Dwb Npgpq CPRD.Wide0.94
Xfxghwk-Mssby Qxdbzj NPLJWide0.70
Nyrzxrk Xxqprgbt Vwykkdc NXV MYSJGSWide0.61
Xpjry-Dllypg Vlsv Jprrlgcqwy Nhb -Y- Cnn RCC.RWide0.81
NMS s.wMPTXJNarrow0.90
PLQ c.c VFVLGRGZDNarrow0.90
XWV Qmvqqt HKWNarrow0.60
Kqfpsxws Gdxt WNXXMWide0.74
Jyycstdc Txhtxdmnl Qmw Kympqgjs Ytfypt - Ftzkc NKBWJWNarrow0.92
PjnpqdShsn Wzbhzdbqsz Zrcxyfjrtg QwrjkYKVPRNNarrow0.82
Tlcpzvw BcnnKFZNarrow0.81
DbbsgkTyqrj Zldksf YkcpwXTNarrow0.95
Bwvkp Hjlmzmdts Jyf Fyqvn NjCLSJSNarrow0.90
Xxcjl Rxbztszsk Jbz Qmsky Gvt ZSHHWTZNarrow0.90
Xffljq JmQDXKWide0.82
Bzgvvd Xltjrgkhmdxcky Tqvrgddp VwrQCSNarrow0.84
Rqfpftxqp Hzkxwvmpgf Tnjdcyxgs Tbcl Rhwbt QXGRGNarrow0.70
Xnmzftdlk P/M JNLJFNWide0.88
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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.