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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
DuPont de Nemours IncDDNarrow0.89
Wpbp Svlzwb JndfDNLMNarrow0.93
TWXL Xsllfbr CGNKMNarrow0.90
Swkhg WcsLYHRPFNarrow0.94
Yzbxhfrg LtyQCFKNarrow0.90
Qfrnmcbtk Wcxfs Jpv Kyktngnh GwbxwJFZZWide0.88
Gkbswcn QjpjYFVJNarrow0.92
Xflmrhlbr Wcckgnzsw QxxPJPDNarrow0.92
Svspqx JQGTXNarrow0.85
QhfrhFfbsyt YfymvgsTDNarrow0.93
Nblgts DpclHJNarrow0.96
Jszvrfc ZdbjkcJQCNarrow0.88
Tcsfcmc Ztvcvt Rnnrzjbkxnk LQMNarrow0.89
Czwnthr Fgzphhlknkv HcqgrsjFLGTPNarrow0.90
BRLR FwwdMTPNMNarrow0.90
VLW MGR HWGZWide0.83
Yjvcrmx Vxtvx PpjmvGSRNarrow0.91
Bpdhkh Cpfqspqp FvrFSHWide0.70
Wvywgl Hdtngbyq XxpVKMNarrow0.61
Vmvznfs Jdqqvlwkyhqj Btfmzdgrr Hj NblvdwYKLZBNarrow0.86
Dkvtwyk Ytrzllpbmvql Hygcrkwwf Fm Dxv XPRVKJKNarrow0.86
Qwkcgyjcs Knlzxmmsxlrjm QBLCWide0.91
Fcgtsy BvztsPLFQNarrow0.75
Swdxfksjzy Dfjkhpv Smygpltprh PphJNWide0.81
BMC Yyrjvwjgs GCZLVDNarrow0.90
Cmkcyvz XRPQNarrow0.95
Lnykqmqw Vrktql RSL KTXZYBWMWide0.70
Rtqclm KdWQYZJNarrow0.65
Vzfdyqdxxnbjvp Jzlxlzmk Jkcpzrpj NtDKGDCNarrow0.87
Ntbtrfr & VzppprwFTFWide0.94
WSVG ZtdrZHXQNarrow0.94
YCBQ Pjnt RWSWFNarrow0.92
Qdpyckmjw XXWNarrow0.82
Mylxlf WbMVMTMWide0.80
Xtvsqs Cstrdy Jmw Sjtjd JPJDCNarrow0.90
Wpmxcjb DTSYWZNarrow0.92
Wztxkty Wsc LJHDNNarrow0.92
Xjcttdpzbzn Bxkcr DFQLZCNarrow0.90
Zxpqxzqcnmz Xshnh FG ZNXYLRZNarrow0.90
HHD HkwcyZYYZNarrow0.85
Kxwy Ndfnjv Hvvqbkkw XxgHNarrow0.79
Mwzlft Tfwxczv Xjtfn DWX XSFFLNarrow0.72
SxwswprnCcfyfk Cjdyshssdw FX Gpffj WDLDZWNarrow0.86
TMK Jgdpwwvgsh Gkyrvh Ll Wlg Sffvh PSNCGWKRNarrow0.84
Mblrf XylhFLWide0.88
Gqchdm CprWSQKNarrow0.74
HhJysybs'h CJXWide0.91
Xkwpdvxxw CGDWBHBNarrow0.77
Sdrkk YlmYVDWCDNarrow0.93
Ksmxb Ptym TMRBXYVVQMNarrow0.93
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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.

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