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9 Stocks to Avoid in a Struggling Economy

Walk away from these richly trading no-moat names with negative moat trends.

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The economy continues to struggle. True, we've seen some bright spots of late: jobs data improved last month, and housing start figures were strong, too. But as the pandemic persists, restaurants, movie theaters, and many small businesses are still operating at reduced occupancy levels (if they're open at all). We're not out of the woods yet.

Given the uncertain state of affairs--and the general frothiness in the stock market, despite the pullback during the past few weeks--we encourage investors to favor companies with well-established and stable competitive advantages. And of course we recommend buying these names only when they're selling at a significant discount to their fair values.

Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.