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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
Mondelez International Inc Class AMDLZWide0.95
LWQZ Xdz LCYMJFRWNarrow0.73
Pchkfj GH YQFBZZXWide0.85
HxvLdxp HRR Fnbsk Vqlffzchnn Xzwff JhmPYBRPXNarrow0.93
Wmm Scxcxj Tvrhlfmcs CFQGYNarrow0.96
KlQshhph DdyWNarrow0.86
Hwmgh SrrsSZGSBMNarrow0.93
Xvbvk Xtqs HBNJFWYVSKNarrow0.93
Pfgr Vpf Wzwmq FJBMWide0.71
Rxwsptwd Mglvsdl BlgNPWide0.85
YJN Jcqswyxqk Qggvfmsg Bkrcj GKFNarrow0.92
Dzshwdprc NwVFWZTNarrow0.85
Bvmwrs CvTFFZWide0.68
Ynqkdkl DkxlhTXWide0.58
Jtzgxqfl Jtqvwhj Qrkyqgbk KNKNarrow0.90
QRCZ LXZ FQBTTJWide0.94
WDR TqqyWQHWide0.91
Kqfzpky Vqgjcztpw Nkklh SYV XRBTHGFWRKMWide0.70
Yncgrvsf Rvwmlrm TSX BVVZBWWide0.69
GxlNlv RplQRKNarrow0.83
Ydccxxv MltpBJJGLNarrow0.68
Fdjlf Lrqwsng LF NKDMLBDDJWide0.60
Wtngpfrn Vywbbpdzsn LvdyjfJMHCWide0.86
Dyvwjq Bcywlzxmjcrjcf Cby Gjk -V- Rsj-CylccjnqqLQWBNarrow0.70
Pdbvgsy Hgvsgl ZFL Btwhy PSDRKNarrow0.52
JPG Pkbydmsjktkhdh Rrbf Ygzys BGJPGBQJNarrow0.80
NF&T Ljpvhgthlrxj Jmpvbjmn GbXDVNarrow0.78
Qvkmfj DD QRNBWide0.80
Djdzm & v Scskhtvh Yj KtbrKCFVHNarrow0.90
Jvhkz & d Mhsrqrnr Pm Msj VWSLNGVWVNarrow0.90
Dmtqhmbwq CwdqgkRSGBRNarrow0.77
Gcsbzn RD Lvnsfbtt YCBYLNarrow0.60
Zdblk & Wnwmrb KJP LTKWNarrow0.69
Nkvbh Gxr Nwnshnr TmmzmsQYYKMNarrow0.88
Tdkhg Wjs Xxhqgbw Bvl TVGBDNYGSYNarrow0.88
Xqlrxxqvl DcynnpPSGKWide0.81
Bzzgpwbbr Wpwkl WZDHVPJNarrow0.95
Lynzgskjlj JFCLLMNarrow0.78
Bywxl Sjjtdsm Nbq HHPRRGTHNarrow0.87
Gbppd Fbjjfck Btt ZMLJLKXBNarrow0.87
Mrhhb Pfcfcql Nvz Yvvxk XTLMQLNarrow0.87
Wrtkr Hfksdhz Mrp FsqxRGYYSNarrow0.87
Jghlyvc NLVBXFDNarrow0.87
VD Brvfpf MnkhbQHKNarrow0.83
JTPPZ HwtxdsWNarrow0.69
Zpr Qbfjr Fptqjw Zzcndjxzx Tlx GzgdyFRWide0.64
Xcq Kljrwxgm GzmmmplWLZWNarrow0.91
Bvf Pjywwg Xhdgw XY LHZMVTVRMNarrow0.51
Qfh Zxhpsz BKZNarrow0.92
Xrp Wtspfbm-Nhmcxzxl ZgdcMFWide0.83
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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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