The best time to buy a stock? When everyone else is ignoring it.
Morningstar makes it easier to find undervalued stocks with real long-term upside—not just short-term hype.
If you want to build a watchlist that goes beyond guesswork, here’s how to use Morningstar Premium to do it the smart way.
TLDR: How to Find Undervalued Stocks with Morningstar
- Use analyst star ratings to identify discounted opportunities
- Compare current price to fair value estimates
- Filter by moat, risk, and margin of safety
- Read full analyst reports for context
- Track your watchlist and get updates when valuations change
Read our review and learn how you can get an exclusive discount here.
Start with 4- and 5-Star Rated Stocks
Morningstar’s star ratings are based on how far a stock’s current price is from its fair value estimate:
- 5 stars = significantly undervalued
- 4 stars = moderately undervalued
This is your first screen when building an undervalued stock watchlist.
You’re not guessing if a stock is cheap. You’re getting a valuation opinion backed by real analysis.
Prioritize Companies with Wide or Narrow Moats
Some cheap stocks are cheap for a reason.
Use Morningstar’s moat ratings to find companies with sustainable competitive advantages.
- Wide moat = long-term durability
- Narrow moat = some edge
- No moat = high risk of disruption
This helps you focus on stocks that are not only undervalued—but resilient.
Use the Fair Value Comparison Tool
Every stock covered by Morningstar analysts comes with a fair value estimate.
You can compare this directly to the current market price to see the discount in percentage terms.
Want to go deeper? Filter for:
- Margin of safety (e.g., 20%+ discount to fair value)
- Low uncertainty rating (for more predictable outcomes)
- Sector or industry preferences
Trending Checking Account Deal:
Read the Full Analyst Reports
Star ratings give you the shortcut. Analyst reports give you the story.
They explain:
- Why the stock is rated undervalued
- What risks to watch
- What catalysts could drive future price movement
This helps you avoid value traps—and gives you the confidence to hold through volatility.
Build and Monitor Your Watchlist
Morningstar Premium lets you:
- Add undervalued stocks to your custom watchlist
- Get alerts when star ratings or fair values change
- Track performance and updates over time
You’re not just finding hidden gems. You’re following them until the time is right.
The Cost? Practically Pays for Itself
Morningstar Premium is $34.95/month—or just $249/year if you go with the annual plan. (Plus, you can get $50 off with this exclusive deal.)
Think about it: one solid insight from a Morningstar analyst could help you dodge a costly mistake or catch a breakout stock early. That alone can cover the subscription—and then some.
If you’re serious about building long-term wealth, this isn’t an expense.
It’s an investment in making smarter decisions.
Key Takeaways
- Morningstar helps you filter for undervalued stocks based on analyst insights
- Use star ratings, moat ratings, and fair value gaps to build a smarter watchlist
- Analyst reports provide depth and confidence in your picks
- Watchlist tools help you stay ready—not reactive
If you want to stop chasing hype and start buying value—
Morningstar is your edge.
Because the best opportunities are often hiding in plain sight.
You just need the right lens to see them.
[GET AN EXCLUSIVE AT MORNINGSTAR]
Here are additional investment research tools to check out. I’ve always been a big fan of Seeking Alpha. But Morningstar has it’s advantages.
Discover more from MoneysMyLife
Subscribe to get the latest posts sent to your email.
