3 High-Quality Stocks to Buy Now
These wide-moat stocks are all trading at least 25% below their fair value estimates.
Rarely does quality go on sale. Just ask the millennial who wants to propose with a Tiffany diamond, the kids who want to buy mom that Prada tote she has always wanted, or the parent who'd like to spend less than $200 on the latest Lego Star Wars Assault on Hoth set.
Yet quality is on sale in the market today. According to Morningstar's Market Fair Value chart, the price/fair value ratio for the median stock our coverage universe is 0.99, suggesting that the market as a whole is fairly valued. Specifically, no-moat stocks--or those we deem to have no significant competitive advantages--are about 3% overpriced. Conversely, those stocks with wide moats--or strong competitive advantages--are undervalued: They're trading at a median price/fair value of 0.94. In other words, the average high-quality stock is 6% underpriced today. (Learn more about our economic moat ratings here.)
Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.