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Stock Strategist

Meet These 5-Star Picks at Our Stocks Forum

Get a firsthand look into some of our favorite firms.

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During volatile times in the market, it's often tough for investors to feel secure. It's during times like these that identifying companies that have built an economic moat becomes even more important.

Behind every company's moat is a management team. Unfortunately, individual investors rarely get the opportunity to directly access a company's senior management. At the same time, the constant pressure for short-term results from Wall Street makes it hard for management teams to find audiences to discuss long-term plans and what makes their business fundamentally attractive. We've filled both of these gaps with the 3rd Annual Morningstar Stocks Forum, held here in Chicago on April 22 and 23. Learn more.

We have invited executives from 16 of our favorite companies--all of which have established economic moats--to give presentations to and take questions from conference attendees. The presentations will focus on the competitive advantages that have historically allowed these firms to generate excess returns for their shareholders. We believe that individual investors, fund managers, and financial advisors, particularly those focused on long-term investing, will benefit from this unique opportunity to get up close and personal with the management teams of some of our favorite companies.

We're excited about this year's lineup of presenters, which features companies of various sizes and across a variety of industries. While we think any one of these companies should be on the radar of any long-term investor, a number of their stocks represent compelling opportunities right now and 10 are currently rated either 4  or 5 stars. To learn firsthand about the long-term value-creation strategies that separate these firms from the rest of the pack and register for the 2008 Morningstar Stocks Forum, click here.

 CarMax (KMX)
Morningstar Rating: 5 stars
Economic Moat: Narrow
Business Risk: Average
CarMax has one of the best business models around and should be able to grow internally and by adding new stores for many years. A strong customer-first culture, combined with scale advantages that allow for a wide inventory selection, gives the company a narrow economic moat.

 Sanofi-Aventis (SNY)
Morningstar Rating: 5 stars
Economic Moat: Wide
Business Risk: Average
Sanofi-Aventis' wide lineup of branded drugs and robust pipeline create strong cash flows with a wide economic moat. We expect its development strength in the neurological class, including multiple sclerosis and depression, to add several blockbuster drugs.

 Canadian Natural Resources (CNQ)
Morningstar Rating: 5 stars
Economic Moat: Narrow
Business Risk: Average
Canadian Natural Resources has a cost-conscious approach to value creation. If it can continue to effectively manage its capital costs, this dominant Canadian energy player should experience years of outsize returns.

 International Speedway (ISCA)
Morningstar Rating: 5 stars
Economic Moat: Wide
Business Risk: Average
International Speedway's wide economic moat is protected by large barriers to entry, formidable intangible assets, and long-term contracts with media outlets. In our opinion, NASCAR is the Major League Baseball of racing, and tracks like ISC's Daytona International Speedway are the Wrigley Field of racetracks--valuable intangible assets.

 FuelTech (FTEK)
Morningstar Rating: 5 stars
Economic Moat: Narrow
Business Risk: Above Average
Fuel Tech has quietly established itself as a leading provider of clean-energy engineering solutions. We think the company's suite of products and management's deep-rooted ties to the utilities industry will translate into substantial growth for this narrow-moat firm.

Other Presenting Companies
 Genentech (DNA)
 Northern Trust (NTRS)
 Magellan Midstream Partners (MMP)
 Exelon (EXC)
 WMS Industries (WMS)
 Allied Capital (ALD)
 Darden Restaurants (DRI)
 Landstar (LSTR)
 Cimarex (XEC)
 China TechFaith Wireless (CNTF)
 IBM (IBM)

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