Four Stocks with High-Return Potential

Why the market's got it wrong on these 5-star names.

Aug 20, 2007

Mentioned: American Express Co (AXP) , Nucor Corp (NUE) , ArcelorMittal SA (MT) , L Brands Inc (LB) , Expeditors International of Washington Inc (EXPD) , Eagle Materials Inc (EXP) , Anheuser-Busch Companies, Inc. (BUD) , Grubb & Ellis Company (GRBEQ) , Star Equity Holdings Inc (STRR) , Boardwalk Pipeline Partners LP (BWP)

Following is a roundup of stocks that recently jumped to 5 stars. By way of background, we award a stock 5 stars when it trades at a suitably large discount--i.e., a margin of safety--to our fair value estimate. Thus, when a stock hits 5-star territory, we consider it an especially compelling value.

Forest Laboratories
Moat: Narrow | Risk: Average | Price/Fair Value Ratio*: 0.76 | Three-Year Expected Annual Return*: 20.9%

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Jeffrey Ptak has a position in the following securities mentioned above: AXP, MSFT. Find out about Morningstar’s editorial policies.

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