Stocks on Santa's Naughty List

Morningstar analysts say these stocks are overvalued, have no moat and have a high or very high uncertainty rating - no wonder they're on Santa's investment naughty list

James Gard 15 December, 2020 | 10:54AM
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Santa with sweets

Santa Claus famously makes a list of which children have been naughty or nice each year - he even checks it twice before deciding on the fairest way of distributing presents.

As Morningstar checks its equivalent records, which stocks are on the naughty list this year? To make it on to the naughty list, a company must have a 1-star rating, which means it's significantly overvalued. It must also have no economic moat (sustainable competitive advantage) and have a high or very high uncertainty rating, a measure of risk used by Morningstar analysts. (The star rating shows how fairly valued stocks are now, while the uncertainty rating forecasts how volatile a company’s cash flow or earnings are likely to be in the future).

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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James Gard  is content editor for