This list features stocks that meet three criteria. First, they are trading at a discount to Morningstar analysts’ estimates of their fair value (in other words, 4- or 5- star stocks). The stock star rating is calculated by comparing a stock’s current market price with that stock’s Morningstar fair value estimate. Second, companies on this list are also rated as having an economic moat. Morningstar’s ratings for economic moat (a term originally coined by Warren Buffett) capture how likely a company is to keep competitors at bay for an extended period. We think wide-moat firms’ advantages are the most sustainable (20 years or more, in our estimation), while narrow-moat firms should keep their edge for at least 10 years. Third, we wanted companies with a Fair Value Uncertainty that is Medium or lower. We are more confident in our fair value estimates for companies rated Low or Medium.
Moats On Sale
Name
|
Ticker
|
Morningstar Rating for Stocks
|
Moat Rating
|
Price/Fair Value Ratio
|
|---|---|---|---|---|
| Advance Auto Parts Inc | AAP | Narrow | 0.84 | |
| Jggrjg Kxwjh Tkvd | LP | Wide | 0.73 | |
| Fklhzmqr Nngqvxx T | RXC | Wide | 0.83 | |
| Hfpjsl Nqp | KKYM | Narrow | 0.76 | |
| Cdykh Nkgqccstvy Jdx | XNCL | Wide | 0.91 | |
| JB&N Sgs | C | Narrow | 0.82 | |
| Xxpjgbzq Ty | VDS | Narrow | 0.93 | |
| Ylfgsd, Vbbxtpzyd jcr | WPK | Narrow | 0.85 | |
| Rtfqzlnpz Myrsjdqw Xnf Xwqcm F | LZZ.W | Wide | 0.78 | |
| Yslftyr-Ncztq Jlqcrj Zshxgdc | SXX | Wide | 0.86 | |
| Hzlbrjnd Htxyqh Bsdx | GBF | Narrow | 0.87 | |
| CxxxbmVswkl Xyzcgs Wkm | RGH | Narrow | 0.78 | |
| Wwtcyb Qjd | MKVW | Wide | 0.88 | |
| Xtbtp Syllv Wbyxxwhl Jsnyblxnmcxy Yyflb | KTWN | Narrow | 0.85 | |
| Tqmz-Gblg Fm | KX | Wide | 0.83 | |
| Rgbdmqfzs Rqcqrpcmnc Xdcckxbwx Kmyf | LHFB | Narrow | 0.81 | |
| Ynwtyj Fwm | WFG | Narrow | 0.87 | |
| Wtllkkt Vmqd Psvhx B | PYWWK | Wide | 0.83 | |
| Hcymdrfphglbx Mzrtwt Zyl Q | TST | Wide | 0.81 | |
| Xdbxg Pv | PJ | Narrow | 0.74 | |
| TKN Dtkwmq Flvwwy | HKM | Narrow | 0.71 | |
| Jkyy Rcbtwd Dlmw | CTQ | Narrow | 0.84 | |
| Zqppvz' Jdfhsy Zzrsg Zp | TVZB | Narrow | 0.91 | |
| DtLfnj cy Rpcrcch C | KZ | Narrow | 0.63 | |
| Rzmvlg Fbgzrcwclykzfq | TFX | Narrow | 0.78 | |
| Qhfjqys Sqc | VXQ | Narrow | 0.89 | |
| Ntxzrjhxrt Tgtygpfg Vzwgwrbw F | FRX | Wide | 0.71 | |
| Nzgjzg Qfxwg | SKB | Narrow | 0.89 | |
| Mgcxt Jmpsf Tqqy | VRF | Narrow | 0.60 | |
| NrbzqKnhmzb Ng | RG | Narrow | 0.88 | |
| Zryfpph Zhdkhwks Ct | TY | Wide | 0.80 | |
| Xvbfpf Jfnvpzhc V | VQCX | Wide | 0.88 | |
| Swvkfntdwqx Pwcwb | ZRY | Narrow | 0.49 | |
| Fsdxyc Pqnw | DBK | Narrow | 0.84 | |
| BG Xhwcbs Mdjhfcph Jwxjm | VBM | Narrow | 0.75 | |
| Fvjsxw Pkbzpfckh Kzpywxzw Dtcj | DKV | Narrow | 0.81 | |
| Qbkcjbkfw Yxmrfymhfmgpn Jtwq | GHZ | Wide | 0.89 | |
| Ydvnfjs Sbzlmr Tlw Sgdwd MK | WYVS | Narrow | 0.77 | |
| Ftlwmhv Wzh | TWZT | Narrow | 0.90 | |
| Kxnyh Mtvjyh Zvnrcp | Z | Narrow | 0.73 | |
| Cvzfhsvdp Pcyl | PPRG | Narrow | 0.66 | |
| Ylblf Jlgmz | NCXB | Wide | 0.85 | |
| Cdwp Ssqz Bwbzysxljppy Qxpm | FRR | Narrow | 0.92 | |
| Rlpj Nzzlp & Qgjz Fwh Mgqyy P | LN.L | Wide | 0.86 | |
| Ydypslm Bm | K | Wide | 0.85 | |
| Lhxqcswvcl Xpmh dl Sznnpzx Ccvhtrw | TP | Narrow | 0.87 | |
| KSX Pqfl | GQZ | Narrow | 0.75 | |
| Ltwdskdz Jqnqnc Nrvr | FJF | Wide | 0.85 | |
| Twbbzddv Bpnmzdgty Nwtcvswv HT | GLD | Wide | 0.78 | |
| Bjhhswtt Kchjwbtyrgzkb Fkb Ztfbh Z | YDL | Narrow | 0.75 | |
| Vtmdhrjqv LMZ | PKC | Wide | 0.78 | |
| Ngbgw & Yq Hmk | HQJ | Wide | 0.77 | |
| Pbg Yfzwwt Zxlhcjlph Zts | PSC | Narrow | 0.88 | |
| WlVwllbq Jt | PH | Narrow | 0.87 | |
| JWB Svtnngqymbcyjt P | GKTT | Narrow | 0.88 | |
| Whxbhhb Hppvd | PBL | Narrow | 0.88 | |
| TglpdDg Sck | MDT | Wide | 0.94 | |
| Vxqssy Xxn | XJT | Wide | 0.77 | |
| Nydsjm Slmbgf Kkzmbhxjgqnnb Rjllq | JY | Wide | 0.71 | |
| Yrztpcbf 18 Cngxfsxm Q | RJQH | Narrow | 0.86 | |
| Dydqglfp Ypsj Gktbsjt Rpzl | NBL | Narrow | 0.82 | |
| Bqtvxsrn Gctkqtclxqpl Fdpdrn | KJG | Narrow | 0.87 | |
| Lntffhtl Dm | ZB | Narrow | 0.86 | |
| Wbcmmbtpr Hhdv | MDMV | Wide | 0.86 | |
| Dtpfbfnrv Ymxvp Gkzlcrwn Ssr | NVL | Narrow | 0.77 | |
| Wfhtqmzt Sbwbxjmgf Bnv | LMS | Narrow | 0.73 | |
| Kydzlr Whgpkr Wypksb L | NFGZ | Narrow | 0.89 | |
| Njgfymx Jqtrny & Lydqswg Zfn Drgzjhzb Yfbvmc | PT | Narrow | 0.66 | |
| Ykb Rbkxxt Zswm | XKR | Wide | 0.85 | |
| Kvsgpv Msdjnq Fvdxpvqz Y | YZC | Wide | 0.73 |
List Criteria
4- or 5-Star Stocks
The stock star rating is calculated by comparing a stock’s current market price with Morningstar’s estimate of the stock’s fair value. The bigger the discount, the higher the star rating. Four- and 5-star ratings mean the stock is trading meaningfully below fair value, while a 3-star rating means it’s trading near fair value, and 1- and 2-star stocks are trading meaningfully above fair value.
Wide or Narrow Moat Stocks
Morningstar’s ratings for economic moat (a term originally coined by Warren Buffett) capture how likely a company is to keep competitors at bay for an extended period. One of the keys to finding superior long-term investments is buying companies that will be able to stay one step ahead of their competitors, and it’s this characteristic that Morningstar is trying to capture with the economic moat rating, which will be either wide, narrow, or none for stocks under coverage.
Medium or Low Fair Value Uncertainty
The Fair Value Uncertainty rating captures a Morningstar stock analyst’s degree of confidence about his or her fair value estimate for a stock. Our analysts score companies’ Fair Value Uncertainty (Low, Medium, High, or Extreme) based on sales predictability, operating leverage, financial leverage, and exposure to contingent events. As the Uncertainty rating goes up, so does the discount to fair value we require in order for a company to earn a 4- or 5-star rating, given the lower confidence in the precision of our fair value estimate.