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Where the Values Are

Great stock values are rare, but they aren't impossible to find.

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Investors trying to hunt for bargains in the equity market might feel as if they're looking for signs of life in the desert. Thanks to this year's slumping market, valuations have declined a bit since late 2004's heady levels but remain steep compared with longer-term market averages. Morningstar's market valuation graph--a visual illustration of the median price/fair value ratio for stocks in our analyst coverage universe--implies that the market as a whole has been overvalued since about mid-2003.

But investors don't have to buy the entire market, and there are pockets of value here and there. A survey of the investment landscape reveals a few potential opportunities.

Amy C. Arnott has a position in the following securities mentioned above: BRK.B. Find out about Morningstar’s editorial policies.