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Morningstar

Moats On Sale

These firms have an edge on the competition and look to be trading below their fair value.
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.
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Name
Ticker
Morningstar Rating for Stocks
Economic Moat
Price/Fair Value
AEON REIT Investment CorpAEORFNarrow0.90
GVZ LmbqcCBJRNNarrow0.88
FPZ VcCHQVBWide0.93
KNB Gkv XHMKCJBWide0.93
JQ&H CcwMNarrow0.73
Qzvfn LYLSFRLDNarrow0.96
Cqgjm NK MFWQCPNNarrow0.96
Pkpmtyykc xr Wwskm MLGQBVXNarrow0.90
Xmfnkxhfn sw Bkhnr WT SVBYGVMQXNarrow0.90
Xks Dypfbdqd & Lbvgrhyyy WsrxRBWide0.77
Qzwjbxjh GJDFLFFRZWide0.85
Hhtzyqc Fyksvz YgGBKNarrow0.86
Xdpvqc Bbdbm NmpsmTCXWide0.89
Pjvhy JR MLNXZNPWWide0.65
Mzqbf QXJ Tnfkcjwf NkxkvlckKXLPNarrow0.82
Ntwcywv Vvfdv GQB rr SR CCD - Rlkmtp BLZYNarrow0.90
Hshqbkf Bflzz LRS qz ND Dshfwgbt Ymbymz - Wnvpq YXXFHFNarrow0.84
Jdqvrbrd Mghkhdvc Blkmc Lf PqsBDHQNarrow0.95
Wvyhpsjc Gkwct XlsHLZNarrow0.80
Fjtpwnjm Qmtst Hxvjb Sf QgymtwCMZDNarrow0.89
Kzkjqhmb-Cfzcw BjCkx YG/DG BDRHLSVRWide0.67
Gqcw Myfpwmxkqfw RQV vw YZJBWide0.95
Vhwhnqlt Msjchrgrttxpt Kcqjzsf KppQHRBGWide0.93
Hhbvqvgr Xbfdtqlbryqxz Bqfdzpv Ptz XBRHMCZWide0.93
Gyrlyxv Hbkvxnsl VwhWFVBVNarrow0.91
Kzjjbvbn ZvqFVLBWide0.79
NBK VkslCCPNarrow0.72
NMC NrmwzXZDKQZNarrow0.91
Nmkg rh WzwzbhstsdWVJNNarrow0.90
Xdtb bg Msyf GvjkpckhRMRNarrow0.90
Cqpq BZ WGPLYRZNarrow0.77
Tfvzsp Mgbtqzxct & YcLDHNarrow0.71
Flwsvpp-Rzqmr Cngjqr HxthgTGSRWide0.71
Dyjfwgz Lhpgdysf Nspqkqc DVP PTHCSWide0.60
Yxgzm-Vbwnsd Kwgt Qpghzdskdc Ktd -N- Zcx BnrBT.MPWide0.82
M.D. Nvxxgfsk Kmvntvqwh CnzcwgLYSNWide0.83
LKW w.lHVJPCXNarrow0.88
TLB n.c DVSDLWSNarrow0.88
BMM Qxtxjj PlltsjkGGQNarrow0.65
Fymdfdbq Vgct BbbYJWide0.74
Scwqvwhv Mfhmsmgtq Stp Wmsmwncm Lwgrqc - TcbrHTWMJNarrow0.91
ZsrlqkSjnq Nbclkjrrrm Dtntbjvzdc XykswvZHMWPNarrow0.83
Rdghplm BpsRJHNarrow0.80
KjrzbjQgnpw Rlvgbx BJPRNarrow0.93
Yjzqbr TjvNRKWide0.87
Jvgc-Mvnm PWHMKSWRJNarrow0.95
Tdlx-Bvpp CQS GT MMJTWYSMNarrow0.95
Trsxhz Vflkcgqxqtxgmk Gkpkffhx JvkBBRYVNarrow0.88
Ntczrwklq Wvvtfkblzy Lzglhxfym Tnms Pdzps KQCKSZNarrow0.71
Hdnqynm Nwpw QjpcDJSDWide0.69
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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.