7 Wide-Moat Stocks to Avoid--For Now
These large companies have sustainable competitive advantages, but their stocks are too pricey for our taste.
These large companies have sustainable competitive advantages, but their stocks are too pricey for our taste.
Regular readers of this column know that Morningstar has a thing for moats. We think that companies that have established significant competitive advantages--or in our parlance, that have dug moats--can better withstand competition and earn high returns on capital for years to come.
However, valuation matters, too. As a result, we can be positive on a company but negative on its stock. Sure, our analysts may suggest on occasion that investors pick up shares of particular wide-moat companies that are fairly valued by our metrics. But you'd be hard pressed to find anyone at Morningstar who thinks it's a good idea to buy a wide-moat stock trading in 1-star range.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.