Four cheap U.S. stocks that are winning

Who said you can't get a sustainable competitive advantage on sale?

Vikram Barhat 10 April, 2019 | 5:00PM

In the age of disruptive technologies, persistent product innovation, and fickle consumer tastes, only businesses that possess a durable competitive advantage, or wide economic moat, can stave off rivals for an extended period and sustain growth. The concept of economic moat was coined by Warren Buffet, who believes that wider a company’s economic moat, the better the chances of its long-term success, and prospects of high returns on capital.

Wide-moat stocks that are trading meaningfully below their fair value estimates stand a better chance of outperforming the market. A measure of the credence of moat rating is borne out by the performance of the Morningstar Wide Moat Focus Index, which has returned a juicy 12.4% annually over the past 15 years, as of April 03, handily beating the 8% gains for the S&P 500 index over the same time frame.

A deep dive into the vast universe of Morningstar equity coverage turned up some formidable wide-moat names with value discount. Here’s a closer look at the following four companies that represent attractive investment opportunities.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Cardinal Health Inc59.72 USD-1.16
Compass Minerals International Inc62.84 USD-0.22
Kellogg Co65.52 USD-0.23
UnitedHealth Group Inc301.43 USD-0.23

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.