As market shocks continue to reverberate, Morningstar has identified the stocks of what it considers great companies that are selling at great prices.
In Morningstar’s view, these exceptional companies have carved out solid — and sometimes growing — competitive advantages that will enable them to prosper for a long time. They have built wide economic moats.
These companies are also led by managers with a record of allocating capital in ways that add value.
Here’s what Morningstar researchers looked for to produce the firm’s list of great companies.
Their Morningstar moat trend rating had to be stable or positive, meaning they had unmatched competitive positions that were stable or on the upswing.
Their Morningstar stewardship rating had to be exemplary, indicating that they were led by adept corporate managers who had demonstrated that their investments and acquisitions supported their companies’ competitive advantages and core businesses — without paying through the nose to do so.
Morningstar’s researchers also looked for company stocks with low or medium fair value uncertainties. The reason: This rating indicates the predictability of a company’s future cash flows.
Morningstar has considerable confidence in its fair value estimates of companies with low and medium uncertainty ratings, according to Susan Dziubinski, the firm’s director of content, who compiled the list.
Finally, the stocks of Morningstar’s great companies had to be selling with a rating of four or five stars as of March 14. On this list, Ambev SA and Anheuser-Busch InBev have five-star ratings; the rest have four stars.
Check out the gallery for Morningstar’s 28 great companies selling a great prices, presented alphabetically.
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