Last week, we took a look at wide- and narrow-moat stocks that were beating the market this year yet still looked undervalued by our metrics. This week, we're expanding our view to include no-moat stocks.
As a reminder: No-moat firms don't have long-term structural advantages over their competitors, so investing in these names demands a somewhat different mindset. For starters, no-moat stocks often cluster in in economically cyclical industries, which may require investors to assume a longer-than-usual time horizon for payoff. Further, investors trolling among lower-quality names should also brace for more volatility than they might experience with higher-quality fare.
This article is exclusive to Morningstar Premium members.
Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.