Morningstar Advisor - October/November 2012 - (Page 78)

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 49 stocks that fit that profile as of Aug. 30, 2012, 10 less than made the list on June 30, 2012. Name Industry Market Cap ($Mil) EPS TTM P/E Ratio (trailing) Revenue Growth % 3 Yr EPS Dividend Yield ROE % Growth % % Current (trailing) 3 Yr 3M Co MMM Applied Materials, Inc. AMAT Autodesk, Inc. ADSK Bank of New York Mellon Corp BK Berkshire Hathaway Inc Class B BRK.B BlackRock Inc BLK Boardwalk Pipeline Partners LP BWP Buckeye Partners, L.P. BPL Caterpillar Inc CAT Cerner Corporation CERN CH Robinson Worldwide, Inc. CHRW Cisco Systems Inc CSCO Compass Minerals International, Inc. CMP Enbridge, Inc. ENB Exelon Corp EXC Expeditors International of Washington, Inc. EXPD Express Scripts ESRX Facebook Inc Class A FB General Dynamics GD General Electric Co GE Intel Corp INTC Johnson & Johnson JNJ Kinder Morgan Management LLC KMR Lowe's Companies Inc. LOW Martin Marietta Materials MLM Maxim Integrated Products Inc. MXIM Medtronic, Inc. MDT Micros Systems, Inc. MCRS Microsoft Corporation MSFT MSCI, Inc. MSCI National Oilwell Varco, Inc. NOV Northern Trust Corporation NTRS Novartis AG ADR NVS Oracle Corporation ORCL Paychex, Inc. PAYX Diversified Industrials Semiconductor Equipment & Materials Software - Application Asset Management Insurance - Diversified Asset Management Oil & Gas Midstream Oil & Gas Midstream Farm & Construction Equipment Health Information Services Integrated Shipping & Logistics Communication Equipment Industrial Metals & Minerals Oil & Gas Midstream Utilities - Diversified Integrated Shipping & Logistics Health Care Plans Internet Content & Information Aerospace & Defense Diversified Industrials Semiconductors Drug Manufacturers - Major Oil & Gas Midstream Home Improvement Stores Building Materials Semiconductors Medical Devices Software - Application Software - Infrastructure Business Services Oil & Gas Equipment & Services Asset Management Drug Manufacturers - Major Software - Infrastructure Staffing & Outsourcing Services 62,779 14,355 7,392 27,040 203,798 30,515 5,625 4,888 58,219 12,222 9,278 102,209 2,428 31,403 29,764 8,211 50,469 44,842 23,238 231,133 116,020 187,892 7,610 32,187 3,983 7,923 42,489 4,227 258,041 4,415 35,632 11,530 143,768 157,510 12,232 6.12 0.83 1.25 1.87 4.95 12.56 1.55 0.59 8.94 2.04 2.72 1.35 3.87 0.78 2.34 1.68 1.83 0.15 6.82 1.15 2.36 3.14 -0.43 1.50 1.40 1.29 3.48 2.03 2.00 1.43 5.45 2.66 3.54 1.96 1.51 15.13 14.08 24.51 12.06 17.04 14.04 17.39 83.33 9.54 35.84 20.79 14.08 18.55 49.75 15.58 21.74 34.25 116.28 9.56 16.72 10.50 21.46 — 18.59 60.24 22.99 12.63 24.94 15.41 24.51 14.45 17.48 16.67 16.16 22.03 5.43 8.96 -1.46 2.76 10.06 21.49 13.21 35.89 5.42 9.54 6.41 3.01 -1.80 6.35 0.11 2.97 28.03 — 3.70 -6.90 12.84 0.67 — 1.35 -6.79 13.45 3.50 6.86 8.05 27.00 2.96 -4.13 11.72 16.87 2.30 6.82 27.47 15.10 19.15 24.46 28.87 -16.61 -26.32 9.35 15.92 8.00 -3.70 -2.56 -10.61 -3.17 9.32 18.00 — 3.65 -10.58 37.47 -8.60 -47.43 -1.36 -24.77 250.34 22.83 20.16 7.28 27.28 -1.38 -10.71 1.73 21.60 0.67 2.55 2.97 — 2.27 — 3.33 7.84 8.29 2.13 — 2.30 1.47 2.64 2.77 4.52 1.36 — — 2.98 3.02 3.69 3.46 — 2.06 1.84 3.31 2.37 — 2.60 — 0.57 2.42 4.17 0.74 3.80 25.69 12.78 15.54 6.60 6.86 9.27 8.37 2.22 40.75 15.18 34.65 14.93 28.87 8.16 9.37 18.39 8.80 2.89 17.78 9.84 25.42 14.26 -1.78 11.66 4.59 15.32 21.87 15.83 27.51 13.43 13.01 8.90 13.18 23.92 35.35 78 Morningstar Advisor October/November 2012

Table of Contents for the Digital Edition of Morningstar Advisor - October/November 2012

Morningstar Advisor - October/November 2012
Contents
Contributors
Letter From the Editor
Ill Communication
Do You Use Factor-Investing Strategies?
Practicing What She Preaches
How to Determine the True Price of ETFs
The Quant Factor
Managers Dispute the Death of Equities
Investments á la Carte
Investment Briefs
Five Inconvenient Truths of Manager Research
Health Care’s Outlook Clarifies
Exploring the World of Factors
Uncloaking the Alpha Machine
Factor Strategies Gain Footholds in Practices
Big Mo
Fitting Factors Into the Formula
Clients Have a Friend in Luther King
Less-Liquid Holdings Mean More-Solid Results
Retirement-Withdrawal Strategies Quantified
Amid Turmoil, Don’t Discount Foreign Equities
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
Should I Stay or Should I Go?

Morningstar Advisor - October/November 2012