Karen Wallace: Four of the 10 cheapest stocks in the Morningstar Wide Moat Focus Index are currently among our analysts' highest-conviction picks. The Wide Moat Focus Index targets stocks with strong competitive advantages that are trading at a discount to our analysts' estimates of their fair values.
Stericycle is an integrated specialty waste hauler in the medical industry. Its wide moat owes to its unmatched scale in medical waste collection, treatment, and disposal assets, which combine to create cost advantage and customer switching costs. Stericycle's ability to manage the entire disposal process has attracted a dense network of over 500,000 customers with an annual retention rate of over 90%. As of June 19, Stericycle was trading at almost a 30% discount to our fair value estimate.
As the largest pharmacy benefit manager, Express Scripts has unparalleled supplier pricing power and scale advantages. Due to the large number of adjusted claims processed, Express Scripts can negotiate favorable drug pricing with suppliers, which allows it to expand its client base by providing low-cost products, while at the same time preserving its gross margins. Express Scripts is trading 24% below our fair value estimate.
Specialty pharmaceutical firm Allergan owes its wide moat to an industry-leading portfolio in ophthalmology and aesthetics. These markets enjoy much higher barriers to entry and lower risk of generic competition than most pharmaceutical products. The company's product portfolio is also broadly diversified with only two products exceeding $1 billion in revenue: Botox and Restasis. It currently trades at around a 20% discount to our fair value estimate.
Finally, media conglomerate Disney is two distinct yet complementary businesses rolled into one. The media network business includes ESPN and ABC; the Disney-branded businesses include parks, filmed entertainment, and consumer products. Both segments have demonstrated strong pricing power in the past few years. Disney is trading at around a 20% discount to our fair value estimate.