Morningstar Advisor - October/November 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 49 stocks that fit that profile as of Aug. 31, 2013, 14 more than made the list on June 30, 2013. When a stock trades at a suitably wide discount to our estimate, we award Industry Allergan, Inc. AGN AstraZeneca PLC ADR AZN Baxter International Inc. BAX Berkshire Hathaway Inc Class B BRK.B 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 Drug Manufacturers - Specialty & Drug Manufacturers - Major Medical Instruments & Supplies Insurance - Diversified Integrated Shipping & Logistics 26,236 61,615 37,756 259,939 9,062 3.11 3.92 4.02 7.61 3.66 31.55 11.20 17.64 16.58 16.29 8.84 -5.17 4.15 13.03 14.45 20.82 -1.37 5.20 20.02 19.88 0.23 5.69 2.65 — 2.43 16.33 25.95 33.46 8.81 43.15 Coca-Cola Co KO Compass Minerals International, Inc. CMP Covidien PLC COV CSX Corp CSX eBay Inc EBAY Beverages - Soft Drinks Industrial Metals & Minerals Medical Instruments & Supplies Railroads Specialty Retail 169,258 2,467 27,324 25,074 64,714 1.89 2.90 3.76 1.84 2.02 21.19 26.04 16.00 13.50 25.58 15.72 -0.74 4.92 9.15 17.26 10.38 -18.64 29.86 22.94 2.83 2.80 2.89 1.75 2.36 — 26.68 19.69 17.17 20.43 13.14 Enbridge, Inc. ENB Exelon Corp EXC Expeditors International of Washington, Inc. Express Scripts ESRX Exxon Mobil Corporation XOM Oil & Gas Midstream Utilities - Diversified Integrated Shipping & Logistics Health Care Plans Oil & Gas Integrated 33,813 26,117 8,372 52,011 383,646 0.79 1.35 1.65 2.18 7.95 60.24 27.40 25.19 29.33 9.53 26.62 10.69 13.48 56.00 15.80 -28.40 -29.72 12.25 4.10 34.57 2.96 5.48 1.43 — 2.75 8.77 4.46 16.05 7.88 27.73 Fastenal Company FAST Franklin Resources Inc. BEN General Electric Co GE Intel Corp INTC International Business Machines Corp IBM Industrial Distribution Asset Management Diversified Industrials Semiconductors Information Technology Services 13,059 29,321 235,653 109,504 199,663 1.47 3.36 1.36 1.86 14.09 33.33 14.56 18.05 12.56 13.46 17.53 19.19 -1.73 14.94 2.96 31.82 32.47 8.50 40.38 12.81 1.73 0.82 3.20 4.09 1.98 26.50 23.03 11.67 18.49 83.28 ITC Holdings Corp ITC Kinder Morgan Energy Partners LP KMP Kinder Morgan Management LLC KMR Martin Marietta Materials MLM McCormick & Company, Inc. MKC Utilities - Regulated Electric Oil & Gas Midstream Oil & Gas Midstream Building Materials Packaged Foods 4,663 35,338 9,709 4,441 8,929 3.79 3.61 1.55 2.12 3.04 24.21 21.01 51.28 49.26 25.06 10.18 7.26 0.00 6.17 7.94 11.74 — — -1.42 10.23 1.75 6.34 — 1.67 1.97 13.97 11.44 5.91 6.84 24.39 McDonald's Corporation MCD Medtronic, Inc. MDT National Oilwell Varco, Inc. NOV Nestle SA ADR NSRGY Norfolk Southern Corporation NSC Restaurants Medical Devices Oil & Gas Equipment & Services Packaged Foods Railroads 94,327 52,138 31,765 211,063 22,511 5.45 3.37 5.40 3.38 5.39 18.21 16.39 12.56 19.05 13.57 6.62 1.60 16.39 -4.98 11.48 9.25 6.50 18.32 4.49 24.84 3.26 2.05 0.86 2.77 2.80 36.59 19.38 12.25 17.77 17.33 Novartis AG ADR NVS Novo Nordisk A/S ADR NVO ONEOK Partners, L.P. OKS Oracle Corporation ORCL PepsiCo Inc PEP Drug Manufacturers - Major Biotechnology Oil & Gas Midstream Software - Infrastructure Beverages - Soft Drinks 178,582 91,817 10,916 147,538 122,961 3.86 44.31 2.48 2.26 4.25 18.55 22.94 19.88 14.31 19.69 8.47 15.17 16.29 11.50 14.85 1.78 29.67 19.09 23.15 1.31 3.47 1.36 5.71 0.56 2.73 14.26 68.77 12.68 24.74 30.66 78 Morningstar Advisor October/November 2013 EPS Dividend Yield ROE % Growth % % Current (trailing) 3 Yr

Table of Contents for the Digital Edition of Morningstar Advisor - October/November 2013

Morningstar Advisor - October/November 2013
Contents
Contributors
Letter From the Editor
How to Make Social Media Work for You
Do Mutual Funds Still Have a Role?
More Personal Than Finance
How to Handle Your TIPS Positions
A Real Estate Veteran Starts From Scratch
Investments á la Carte
Investment Briefs
When to Say No
Take a Guarded Approach to Homebuilders
Fund Distribution Has Been Turned on Its Head. Now What?
Winning the Distribution Battle
Active ETFs Wait for Their Heyday
A Fund Firm Defies Indexing Trend
Piloting New Channels
A Good Fit
The Predictive Power of Fair Value Estimates
Does Being Prudent Pay Off?
Utilizing Utilities’ Total Return
Stuck in the Middle Is Not a Bad Place to Be
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
The Good Guys Win

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