7 Cheap Small-Cap Stocks With Moats
These quality stocks are all trading in 4- and 5-star range.
Small caps are having their day: The Morningstar US Small Cap Index is up about 8% this year as of this writing, nudging ahead of its large-cap rival for the year to date. Yet small caps still lag their large-cap counterparts for the three- and five-year trailing periods.
With that in mind, we wanted to go fishing for opportunity in the small-cap pond. Specifically, we sought out quality small caps that are mispriced according to our metrics. These stocks land in Morningstar's small-cap style box designation, have narrow moats or better, and are trading in 4- or 5-star range. We focused only on those stocks whose uncertainty ratings were low or medium, suggesting that we have a good deal of confidence in our fair-value estimates of these stocks.
Susan Dziubinski does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.