10 Undervalued Quality Stocks

Plus: What you need to know about the Silicon Valley Bank collapse, consumer credit worries and undervalued earnings crushers. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_smartinvestor&utm_content=43161&elqTrackId=1e3647aea91548f3b09550fe6f966589&elq=331947cfa99e4d53b57c248c70559ca2&elqaid=43161&elqat=1&elqCampaignId=20787) [Smart Investor] Smart Investor [Tom Lauricella, chief markets editor]( Connect with Tom on [LinkedIn]( [Tom Lauricella] In this week’s newsletter: - [10 Undervalued, High-Quality Stocks With Competitive Advantages]( - [Bank Stock Selloff Triggered by SVB Financial Liquidity Crunch]( - [5 Short-Term Bond Funds That Disappointed Investors]( - [9 Undervalued Stocks That Crushed Earnings]( - [Strong February Jobs Report Leaves Fed on Track for More Rate Hikes]( - [The February CPI Report Holds the Key to the Fed’s Next Move]( Things are suddenly feeling a bit [rocky]( out there. It's a year into the Federal Reserve’s rate hikes, the bear market for stocks and bonds and we now have our first real crack in the financial markets: the collapse of Silicon Valley Bank. On the surface, the SVB’s woes are crypto-related. But the jitters this week have more to do with knock-on effects of the Fed’s rate hikes on the bond market. If you weren’t around for the financial crisis – not saying that’s what this is – it’s the contagion that gets you, not necessarily the original event. So, what is happening out there? Sandy Ward [explains the hit that bank stocks have taken]( on the SVB crisis. That bank stock selloff in turn has left some fund investors nursing painful losses. Here’s a look at [which funds suffered the biggest losses from the bank stock rout](. Ward [also explores another worry]( – growing signs of stress on consumer borrowers when it comes to credit card debt and auto loans – and what it could mean for the economy and markets. Watch this space. It could be an important storyline in the months to come. And at the same time, it seems like we’ve still got a ways to go when it comes to interest-rate hikes from the Fed following the latest jobs report. It turns out that, [despite all the rate increases we’ve already had, companies are continuing to hire at a pretty darn solid pace](. But just how much will the Fed raise rates? It could very well be that this coming week’s numbers on inflation will make the difference. Here’s [what to expect from the CPI report when it comes out Tuesday](. If this week is a harbinger of things to come – and it’s really too early to know for sure – the quality of the investments in your portfolio are going to matter more and more. Case in point: short-term bond funds – which many investors turn to as a safe haven in a portfolio – that took on a higher level of risk last year, costing investors money. Katherine Lynch [highlights five funds]( that posted outsize losses last year. Meanwhile, Lauren Solberg screens for undervalued quality stocks that have the added feature of strong competitive advantages (aka “moats). You can [find the list here]( along with commentary from Morningstar’s stock analysts on names such as Adobe and Microsoft. With earnings season just about wrapped up, Jakir Hossain combed through the list of stocks that blew away earnings estimates but also remain in the bargain bin. He’s got [nine stocks for you]( including Activision Blizzard, Gilead, and HSBC. And among our other investment screens this week, we’ve got [three undervalued cyclical stocks]( and [three great growth-stock ETFs](. As always, check out the [Markets page]( on Morningstar.com for the latest on key trends you need to know about. [10 Undervalued, High-Quality Stocks With Competitive Advantages]( [10 Undervalued, High-Quality Stocks With Competitive Advantages]( Wide-moat names including Adobe and Microsoft have strong balance sheets and discounted stock prices. Lauren Solberg [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] Morningstar Specialists [Markets Brief: The February CPI Report Holds the Key to the Fed’s Next Move]( [Markets Brief: The February CPI Report Holds the Key to the Fed’s Next Move]( What to look for as forecasts call for another hot reading on inflation. Lauren Solberg, Jakir Hossain [Strong February Jobs Report Leaves Fed on Track for More Rate Hikes]( [Strong February Jobs Report Leaves Fed on Track for More Rate Hikes]( Slower wage gains offer good news on inflation, but the upcoming CPI report could determine how aggressive the next Fed move is. Lauren Solberg [Which Funds Are Taking the Biggest Hit on Silicon Valley Bank and Other Bank Stocks?]( [Which Funds Are Taking the Biggest Hit on Silicon Valley Bank and Other Bank Stocks?]( Regional bank ETFs post large declines, and even some diversified funds suffer from financials exposure. Katherine Lynch [5 Short-Term Bond Funds That Disappointed Investors]( [5 Short-Term Bond Funds That Disappointed Investors]( These funds made a bad year worse, offering a lesson for investors. Katherine Lynch [Top 10 Buys and Sells From Our Ultimate Stock-Pickers]( [Top 10 Buys and Sells From Our Ultimate Stock-Pickers]( Funds see value in a diverse range of sectors. Verushka Shetty, Eric Compton [10 Best Growth Stocks to Buy for the Long Term]( [10 Best Growth Stocks to Buy for the Long Term]( The stocks of these high-quality growth companies look undervalued today. Susan Dziubinski [Is Amazon Stock a Buy After Stores Set to Close?]( [Is Amazon Stock a Buy After Stores Set to Close?]( Cost-cutting continues at the e-commerce and cloud services giant. Here’s what we think of the stock now. Dan Romanoff [Lubos Pastor: ‘Judging Fund Managers by the Company They Keep’]( [Lubos Pastor: ‘Judging Fund Managers by the Company They Keep’]( A leading academic researcher on stock volatility, ESG and expected returns, the liquidity risk factor, and more. Christine Benz, Jeff Ptak [3 of the Best Stocks to Spend Your Tax Refund On]( [3 of the Best Stocks to Spend Your Tax Refund On]( These low-priced stocks from high-quality companies look undervalued today. Susan Dziubinski [Should You Invest in Stocks, Bonds, or a 4% CD? ]( [Should You Invest in Stocks, Bonds, or a 4% CD?]( Cash yields look more attractive than they have in years―here’s how to decide. Christine Benz Chart of the Week [Which Bank Stocks Were Hit Hardest by the SVB Financial Selloff]( [Which Bank Stocks Were Hit Hardest by the SVB Financial Selloff]( Rising funding costs put pressure on banks’ net interest income. Sandy Ward [Read It Now]( Share: [facebook]( [twitter]( [linkedin]( Popular This Week [How IRA Investors Can Avoid the ‘Procrastination Penalty’]( Maria Bruno, Vanguard's head of U.S. Wealth Planning Research, discusses trends in IRA contributions and how to maximize the funds going into your account. Christine Benz [Will ChatGPT Improve Financial Literacy?]( The program has glitches, but also potential. John Rekenthaler [6 IRA Mistakes to Avoid in 2023]( With a little planning, investors can maximize their individual retirement accounts. Christine Benz, Susan Dziubinski [3 Stocks That Stress Equal Pay]( American Express, Citigroup, and Adobe can add gender equality to your portfolio. Allie McCallion, Charity Blue Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. 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