Morningstar Advisor - August/September 2011 - (Page 76)

By the Numbers: Stocks Undervalued Stocks With Wide Moats Undervalued stocks with significant competitive advantages can make attractive long-term holdings. With that in mind, we scoured our 2,000-plus stock coverage universe for high-quality stocks (those boasting wide economic moats) that are trading on the cheap (rated 4 or 5 stars by our analysts). Our analysts award wide economic moats to companies that they believe possess durable competitive advantages that are likely to confer economic profits well into the future. When a stock trades at a suitably wide discount to our estimate, we award it 4 or 5 stars. The wider the discount, the higher the star rating, and vice versa. There were 35 stocks that fit that profile as of June 30, 2011, seven more than made the list on April 30, 2011. Tough economic news and continued worries about sovereign debt in the United States and abroad weighed on the market in the second quarter of 2011. The broad-based Morningstar U.S. Index dropped 0.25% during the 13 weeks ended June 28. The index was still 4.64% higher for the year to date and up by more than 24% for the past 12 months. Name Industry Market Cap ($Mil) EPS TTM P/E Ratio (trailing) Revenue Growth % 3 Yr EPS Dividend Yield ROE % Growth % % Current (trailing) 3 Yr Abbott Laboratories ABT Applied Materials, Inc. AMAT Avon Products AVP Bank of New York Mellon BK Berkshire Hathaway Inc B BRK.B BlackRock, Inc. BLK Cisco Systems, Inc. CSCO Credit Suisse Group ADR CS eBay Inc EBAY Exelon Corp EXC Exxon Mobil Corporation XOM General Electric Co GE Google, Inc. GOOG HSBC Holdings PLC ADR HBC Johnson & Johnson JNJ Lockheed Martin Corporation LMT Lowe's Companies Inc. LOW Medtronic, Inc. MDT Merck & Co Inc MRK Microsoft Corporation MSFT Northern Trust Corporation NTRS Novartis AG ADR NVS Oracle Corporation ORCL Paychex, Inc. PAYX Pfizer Inc PFE Procter & Gamble Company PG Roche Holding AG ADR RHHBY St Jude Medical, Inc. STJ St. Joe Corporation JOE Stryker Corporation SYK The Western Union Company WU U.S. Bancorp USB Vulcan Materials Company VMC Wal-Mart Stores, Inc. WMT Zimmer Holdings, Inc. ZMH Drug Manufacturers - Major Semiconductor Equipment & Materials Household & Personal Products Asset Management Insurance - Reinsurance Asset Management Communication Equipment Banks - Global Specialty Retail Utilities - Diversified Oil & Gas Integrated Diversified Industrials Internet Content & Information Banks - Global Drug Manufacturers - Major Aerospace & Defense Home Improvement Stores Medical Devices Drug Manufacturers - Major Software - Infrastructure Asset Management Drug Manufacturers - Major Software - Infrastructure Staffing & Outsourcing Services Drug Manufacturers - Major Household & Personal Products Drug Manufacturers - Major Medical Devices Real Estate - General Medical Instruments & Supplies Personal Services Banks - Regional - US Building Materials Discount Stores Medical Devices 82,812 17,190 11,796 32,223 179,466 37,603 85,583 46,467 42,727 28,443 401,821 202,034 172,521 178,352 185,164 28,347 30,286 40,401 109,666 222,035 11,123 169,075 168,226 11,340 164,185 180,597 142,219 15,749 1,805 23,222 12,354 48,744 5,078 186,546 12,391 2.88 1.18 1.64 2.11 4.61 11.43 1.27 3.49 1.42 3.74 7.02 1.20 25.75 — 4.41 8.07 1.44 2.86 0.52 2.51 2.73 4.21 1.67 1.41 1.05 3.72 2.53 2.73 -0.11 3.16 1.38 1.92 -0.87 4.58 3.02 18.25 10.99 17.21 12.02 16.81 16.78 12.24 9.41 22.78 11.45 11.59 14.64 19.65 13.77 15.06 10.96 16.18 13.48 68.49 10.34 16.81 14.53 19.72 21.74 19.61 16.75 13.99 17.48 — 18.55 14.51 13.28 — 12.36 20.88 10.71 -0.64 3.01 6.98 4.82 21.14 4.66 -7.24 6.07 -0.48 -1.79 -4.50 20.90 -3.52 0.27 3.04 0.37 5.64 23.87 6.92 1.30 10.64 16.67 1.97 11.88 1.06 0.54 10.97 -35.86 6.85 1.95 8.98 -8.39 3.68 2.69 8.62 -16.45 4.73 -2.03 -2.48 11.90 4.37 -17.63 75.87 -1.50 -5.11 -21.24 25.56 -23.84 9.61 3.80 -8.60 13.62 — 13.93 -5.43 -6.01 16.36 -0.75 -4.47 10.57 -3.24 20.04 — 9.35 7.01 -10.71 — 12.61 -3.06 3.38 2.22 3.28 1.54 — 2.43 0.77 3.00 — 4.89 2.19 2.89 — 3.70 3.24 3.53 1.89 2.41 4.28 2.32 2.43 3.24 0.63 3.96 3.66 19.73 20.46 46.12 8.21 7.06 8.64 15.81 11.80 12.50 18.13 26.37 10.75 19.16 9.54 21.78 74.77 10.87 20.24 2.86 43.96 9.92 15.98 24.22 35.73 9.41 3.05 17.16 2.74 102.95 0.88 22.25 — -1.16 1.15 17.83 1.43 276.05 1.38 13.71 2.54 -2.82 2.49 25.11 — 10.37 76 Morningstar Advisor August/September 2011

Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2011

Morningstar Advisor - August/September 2011
Contents
Contributors
Letter From the Editor
Simplicity and Design Matter
Do You Use ETFs Strategically or Tactically?
The Institutional Way
How to Analyze an ETF
Eyeing ETFs’ Next Chapter
Small-Cap/Large-Cap Flip-Flop?
Four Picks for the Present
Investment Briefs
Morningstar Investment Conference
Pitfalls of Peer Groups
A REIT Recovery, With a Catch
Turning Fund Distribution on Its Head
Here Come ETF Managed Portfolios
Circle These Picks Amid the Crop of New ETFs
ETF Analyst Favorites
Beware, the Accidental Portfolio Manager
It’s the Destination, Not the Vehicle
New Growth, Rooted in Experience
Better Ways to Look at ETFs
How to Better Manage Your Clients’ Future(s)
More Bargain Than Bubble
Cheap, Local, and On a Roll
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
First-Quarter Assets Hit an All-Time High
You Say You Want a Revolution?

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