Economic moats--those advantages that allow companies to effectively fend off their competitors--aren't static. They evolve.
For example, over time no-moat companies can carve out competitive advantages and thereby establish moats. Meanwhile already-moaty companies can further sharpen their competitive edges and advance from narrow moat to wide moat. On the flip side, moats can erode over time. Faced with new competitors, expiring patents, or swiftly moving trends, for instance, wide-moat companies can slip into narrow-moat territory--and narrow-moat companies can lose their moats altogether.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.