Morningstar Advisor - February/March 2013 - (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). Name it 4 or 5 stars. The wider the discount, the higher the star rating, and vice versa. There were 32 stocks that fit that profile as of Dec. 31, 2012 When a stock trades at a suitably wide discount to our estimate, we award Industry Applied Materials, Inc. AMAT Bank of New York Mellon Corp BK Berkshire Hathaway Inc Class B BRK.B Boardwalk Pipeline Partners LP BWP CH Robinson Worldwide, Inc. CHRW Our analysts award wide economic moats to companies that they believe possess durable competitive advantages that are likely to provide economic profits well into the future. Market Cap ($Mil) EPS TTM P/E Ratio (trailing) Revenue Growth % 3 Yr Semiconductor Equipment & Materials Asset Management Insurance - Diversified Oil & Gas Midstream Integrated Shipping & Logistics 14,025 31,295 221,838 6,189 10,403 0.09 1.94 5.65 1.58 2.75 126.58 13.23 15.87 15.72 22.99 20.26 2.76 10.06 13.21 6.41 — 19.15 24.46 -16.61 8.00 3.02 1.94 — 7.93 2.08 1.36 6.71 7.73 8.48 34.90 Cisco Systems Inc CSCO Compass Minerals International, Inc. CMP Exelon Corp EXC Expeditors International of Washington, Inc. EXPD Express Scripts ESRX Communication Equipment Industrial Metals & Minerals Utilities - Diversified Integrated Shipping & Logistics Health Care Plans 108,733 2,432 25,022 8,924 45,392 1.55 3.10 1.80 1.60 1.66 12.66 24.04 16.53 24.63 32.47 8.44 -1.80 0.11 2.97 28.03 12.37 -2.56 -3.17 9.32 18.00 2.15 2.70 5.38 1.31 — 16.73 22.87 7.67 16.91 8.83 Franklin Resources Inc. BEN General Electric Co GE GlaxoSmithKline PLC ADR GSK Intel Corp INTC John Wiley & Sons, Inc. Class A JW.A Asset Management Diversified Industrials Drug Manufacturers - Major Semiconductors Publishing 28,800 221,576 112,448 109,472 2,421 8.95 1.26 1.96 2.29 3.13 14.04 15.67 13.72 9.01 12.42 19.19 -6.90 3.99 12.84 3.43 32.47 -10.58 5.41 37.47 17.30 0.81 3.31 5.21 3.95 2.29 21.79 10.82 72.49 24.95 18.15 Johnson & Johnson JNJ Kinder Morgan Management LLC KMR Martin Marietta Materials MLM Microsoft Corporation MSFT National Oilwell Varco, Inc. NOV Drug Manufacturers - Major Oil & Gas Midstream Building Materials Software - Infrastructure Oil & Gas Equipment & Services 200,501 9,285 4,511 225,814 30,263 3.04 -0.29 1.69 1.85 5.63 23.04 — 60.24 14.47 12.14 0.67 — -6.79 8.05 2.96 -8.60 -47.43 -24.77 7.28 -1.38 3.32 — 1.63 3.09 0.69 13.58 -1.08 5.41 24.50 13.06 Novartis AG ADR NVS Oracle Corporation ORCL Paychex, Inc. PAYX Potash Corporation of Saskatchewan, Inc. POT Ritchie Bros. Auctioneers, Inc. RBA Drug Manufacturers - Major Software - Infrastructure Staffing & Outsourcing Services Agricultural Inputs Business Services 158,178 165,038 11,559 36,869 2,255 3.54 2.12 1.54 2.67 0.79 17.89 15.70 20.20 15.22 26.46 11.72 16.87 2.30 -2.65 3.74 1.73 21.60 0.67 -1.47 -9.14 3.80 0.69 4.06 1.31 2.22 12.96 24.88 34.37 27.47 13.50 Spectra Energy Corp SE St Jude Medical, Inc. STJ Sysco Corporation SYY Vulcan Materials Company VMC Weight Watchers International, Inc. WTW Oil & Gas Midstream Medical Devices Food Distribution Building Materials Personal Services 18,023 11,800 18,169 7,073 3,304 1.55 2.38 1.88 -0.65 4.02 17.73 15.15 16.84 — 13.02 1.79 8.75 4.77 -11.11 5.81 0.00 35.63 2.39 — 16.49 4.15 2.40 3.53 0.07 1.18 12.29 16.48 23.16 -2.20 — Western Union Company WU Williams Partners LP WPZ Specialty Finance Oil & Gas Midstream 8,233 17,642 2.02 2.48 6.75 19.65 1.30 119.41 14.06 6.21 3.08 150.47 6.32 11.47 78 Morningstar Advisor February/March 2013 EPS Dividend Yield ROE % Growth % % Current (trailing) 3 Yr

Table of Contents for the Digital Edition of Morningstar Advisor - February/March 2013

Morningstar Advisor - February/March 2013
Contents
Contributors
Letter From the Editor
Social Media, the Old- Fashioned Way
Do You Use Active Strategies?
Youth Appeal
How to Buy the Unloved 2013
Morningstar Managers of the Year
Investments á la Carte
Investment Briefs
Approaches to Absolute-Return Investing
In Agriculture, It’s Good to Be Strong
Yes, There Are Good Active Funds
The Decoupling
Where It Could Pay to Be Active
The Active Fund That Defies Obsolescence
The Epitome of an Active Manager
Lines of Communication
The Existence of Market Timing ‘Intelligence’
A Route to Commodities that Bypasses the Futures Market
Best Positioned for Health-Care Reform
Diversified Stock Funds That Earn Their Stars
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
A Twisted Debate

Morningstar Advisor - February/March 2013