In an article two weeks ago I put the spotlight on stocks that have returned twice as much as the S&P 500 this year, yet still looked undervalued according to Morningstar's estimates of their fair values. These stocks have more room to run, in our opinion.
This week, we're taking a look at stocks through the opposite lens, focusing on those that have underperformed the market in 2017, yet still look overpriced according to Morningstar's estimates of their fair values. In our opinion, these would be stocks to avoid.
Specifically, I screened for stocks that have lost money this year and that are trading in 1- or 2-star range, which suggests they're overvalued. I then narrowed the search further to companies with wide or narrow economic moat ratings. Here is a detailed look at three of the names that made the list.
