The Makings of a Wide Moat
Moat-focused managers discuss how they detect sustainable competitive advantages in the companies they consider for investment.
This analyst blog is part of our coverage of the 2015 Morningstar Investment Conference.
Moats are structural barriers that keep competitors at bay, said Elizabeth Collins, Morningstar's North America director of equity research. When Morningstar stock analysts try to gauge a company's moat--or lack thereof--they look for sustainable competitive advantages and the ability to generate profits for a decade or more. Sources of moat, or competitive advantage, come from a network effect, customer switching costs, intangible assets, efficient scale, and cost advantage.
Brian Hauser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.