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By Jason Stipp | 03-19-2010 04:08 PM

A Solid Pick on Tap

A compelling valuation and serious cost-cutting put this brewer on the menu for Morningstar equities strategist Paul Larson.

Jason Stipp: I'm Jason Stipp for Morningstar. It's hard to find fault with a close to 70% market gain since the bottom last year, but I guess one downside is fewer bargains for those bargain-hunters.

Here with me to talk a little bit about the situation today and where he has found opportunity is Morningstar's Paul Larson. He's editor of Morningstar StockInvestor newsletter. And he's also an equity strategist and our resident core stock-picker. Thanks so much for joining me, Paul.

Paul Larson: Great, thanks for having me, Jason.

Stipp: So, first question for you. You were just telling me a moment ago about the universe of wide-moat 5-star stocks. What has happened to that universe in the last year?

Larson: It has greatly shrunk. A year ago we had a menu of nearly 100 wide-moat stocks that had 5-star ratings. And today, that menu has shrunk down to--today we only have 15 wide-moat stocks that have 5-star ratings on them. So the opportunities are certainly far fewer than they once were.

Stipp: What a difference a year makes. So, for you, you run two portfolios, and your hunting ground is typically wide-moat stocks. What have you been doing in the last few weeks, few months, where have you been looking if that opportunity set is so much smaller today?

Larson: Right. Well, with the thinner opportunities among the wide-moat stocks, I think it has forced me to go fishing in waters that I otherwise wouldn't be dipping my pole in, and one of those areas I've been looking is higher quality narrow-moat stocks.

And I have found one opportunity that I think is worth buying. I actually bought it a couple weeks ago in the model portfolio, the Tortoise portfolio, in StockInvestor. And the company I bought is Molson Coors, ticker TAP.

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