12 Undervalued Wide Moat Stocks To Invest In

Published on August 28, 2023 at 9:39 am by Ramish Cheema in Hedge Funds, News, Stock Analysis

In this piece, we will take a look at 12 undervalued wide moat stocks to invest in. If you want to skip our primer on wide moat investing, then check out 5 Undervalued Wide Moat Stocks To Invest In.

The strategy of wide moat investing has gained a lot of traction over the past few years. This strategy is most commonly attributed to Warren Buffett of Berkshire Hathaway. Mr. Buffett prefers stocks that he believes have a wide economic moat. Moat is competitive advantage that a firm has, and this protects it against competitors in the long term. Firms that are believed to have a moat that protects them for more than 20 years are called wide moat firms while those whose moat protects them for less than 20 years but more than 10 years are called narrow moat stocks. We’ve covered economic moats and Mr. Buffett’s history with this investment strategy in a lot of detail as part of our coverage of 13 Best Wide Moat Stocks To Buy According To Hedge Funds.

Naturally, as opposed to using financial metrics to segregate stocks, separating them based on their economic moats involves a lot of subjectivity. One popular yellow book of wide moat stocks that is relied on these days is Morningstar’s economic moat rating. This rating criteria lists five factors that can be classified as an economic moat. These are switching costs, network effects, intangible assets, cost advantage, and efficient scale. Briefly exploring these, switching costs refer to the pain or monetary outflows that a customer might face when choosing a new product, network effects measure the value benefits to existing customers as more people use a product, while efficient scale measures a firm’s market and the ability of new competitors to enter and increase the number of companies targeting the same revenue pie.

Looking at these criteria, it’s also possible to a list of companies with wide economic moats. Take the example of Tesla, Inc. (NASDAQ:TSLA). Tesla is the world’s largest manufacturer of electric vehicles. The global electric vehicle market was estimated to be worth $384 billion by 2022 end and is expected to sit at $500 billion by the end of this year. From then until 2030 it is projected to grow at a compounded annual growth rate (CAGR) of 17.8% to be worth $1.5 trillion by the end of the forecast period. Tesla’s 2022 revenue was $81.4 billion, making it represent a large portion of the total industry.

Analyzing the firm’s economic moat, there are few competitors that offer vehicles that are similar to Tesla’s at least in the U.S. Other electric vehicle firms, such as Lucid Group, Inc. (NASDAQ:LCID), have higher priced alternatives and other options are either available in limited quantities or offer lower range. When it comes to network effects, the more people that buy a Tesla, the larger the firm’s charging network becomes which then increases the areas that the car can travel to. Tesla is also offering its charging infrastructure to other EV companies, which further expands its coverage. In terms of intangible assets, the firm’s self driving platform is one of the strongest in the market, and the high costs of setting up manufacturing units and efficiently scaling up production also provide Tesla with a competitive advantage as new entrants often struggle and take years to mass produce vehicles. Of course, Tesla isn’t the strongest example of a stock with a wide moat, but it does have some crucial advantages that set it apart from the pack. Morningstar, for its part, believes that Tesla is a narrow moat stock and some of the firms that it classifies as those with wide moats are NVIDIA Corporation (NASDAQ:NVDA) and Microsoft Corporation (NASDAQ:MSFT).

Apart from an economic moat, another way one can select stocks is to see if they are overvalued or undervalued. This is done by determining a fair price for the shares and then comparing it with the trading price. If the trading price is lower than the presumed fair value then the shares are undervalued and vice versa. If you’re interested in undervalued stocks, then check out 15 Undervalued Cyclical Stocks To Buy Now.

So what are some undervalued wide moat stocks? We took a look and some top picks are The Walt Disney Company (NYSE:DIS), Etsy, Inc. (NASDAQ:ETSY), and Zimmer Biomet Holdings, Inc. (NYSE:ZBH).

spatuletail/Shutterstock.com

Our Methodology

To compile our list of undervalued wide stocks to buy, we took a look at the top 30 holdings of the VanEck Morningstar Wide Moat ETF and calculated their share price upside based on the average analyst share price target. Out of these, the top 12 undervalued wide moat stocks to invest in are as follows.

Undervalued Wide Moat Stocks To Invest In

12. Teradyne, Inc. (NASDAQ:TER)

Average Share Price Target: $122

Share Price Upside: 18%

Teradyne, Inc. (NASDAQ:TER) is a technology firm that provides chip companies with the machines to test their products. Despite a slowdown in the chip sector, the firm has beaten analyst EPS estimates in all four of its latest quarters and the stock is rated Buy on average.

During Q2 2023, 41 out of the 910 hedge funds part of Insider Monkey’s database had held a stake in Teradyne, Inc. (NASDAQ:TER). Out of these, Israel Englander’s Millennium Management is the firm’s biggest investor since it owns 1.6 million shares that are worth $182 million.

Just like Etsy, Inc. (NASDAQ:ETSY), The Walt Disney Company (NYSE:DIS), and Zimmer Biomet Holdings, Inc. (NYSE:ZBH), Teradyne, Inc. (NASDAQ:TER) is an undervalued wide moat stock to invest in.

11. Gilead Sciences, Inc. (NASDAQ:GILD)

Average Share Price Target: $91.38

Share Price Upside: 19%

Gilead Sciences, Inc. (NASDAQ:GILD) is one of the largest pharmaceutical companies in the world. The firm was in for some bad news in August as the Food and Drug Administration (FDA) paused enrollment in its trial of a blood cancer drug.

By the end of this year’s second quarter, 56 out of the 910 hedge funds polled by Insider Monkey had invested in the firm. Gilead Sciences, Inc. (NASDAQ:GILD)’s largest hedge fund shareholder is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital courtesy of a $684 million stake.

10. International Flavors & Fragrances Inc. (NYSE:IFF)

Average Share Price Target: $79.41

Share Price Upside: 20%

International Flavors & Fragrances Inc. (NYSE:IFF) is an American perfume company that is one of the largest of its kind and with a global operations base. The firm’s shares tanked by 22% in early August as it missed analyst EPS estimates by a wide margin and undershot the revenue estimates as well.

As of June 2023, 46 out of the 910 hedge funds surveyed by Insider Monkey had held a stake in International Flavors & Fragrances Inc. (NYSE:IFF). Scott Ferguson’s Sachem Head Capital is the company’s biggest stakeholder since it owns $530 million worth of shares.

9. Pfizer Inc. (NYSE:PFE)

Average Share Price Target: $44.08

Share Price Upside: 21%

Pfizer Inc. (NYSE:PFE) is a global pharmaceutical giant. Its shares gave up most of their gains in August after hype surrounding a new coronavirus variant died down as concerns still remain about the demand for coronavirus vaccines.

After digging through 910 hedge funds for their second quarter of 2023 shareholdings, Insider Monkey discovered 73 investors in the firm. Pfizer Inc. (NYSE:PFE)’s largest hedge fund shareholder is Jim Simons’ Renaissance Technologies due to its $308 million stake.

8. Wells Fargo & Company (NYSE:WFC)

Average Share Price Target: $50.98

Share Price Upside: 24%

Wells Fargo & Company (NYSE:WFC) is one of the largest banks in the U.S. It is also one of the most controversial American banks, and is back in the spotlight these days after the Securities and Exchange Commission (SEC) slapped it with a $35 million fine for overcharging thousands of investment accounts.

By the end of this year’s June quarter, 75 out of the 910 hedge funds polled by Insider Monkey had bought Wells Fargo & Company (NYSE:WFC)’s shares. Natixis Global Asset Management’s Harris Associates is the company’s biggest investor since it owns 24 million shares that are worth $1 billion.

7. U.S. Bancorp (NYSE:USB)

Average Share Price Target: $44.18

Share Price Upside: 24%

U.S. Bancorp (NYSE:USB) is another large American bank. The firm is headquartered in Minneapolis, Minnesota. After its shares tanked during the regional banking crisis earlier this year, the firm won some respite in August after a Japanese bank agreed to invest $936 million in the bank.

Insider Monkey scoured through 910 hedge fund portfolios for their second quarter of 2023 investments to discover that 42 had held a stake in the bank. U.S. Bancorp (NYSE:USB)’s largest hedge fund shareholder is Jean-Marie Eveillard’s First Eagle Investment Management due to its $300 million stake.

6. Biogen Inc. (NASDAQ:BIIB)

Average Share Price Target: $330.76

Share Price Upside: 25%

Biogen Inc. (NASDAQ:BIIB) is an American firm that makes and sells treatments for nervous system disorders. Its shares are rated Buy on average and the firm has beaten analyst EPS estimates in all four of its latest quarters.

As of Q2 2023 end, 64 out of the 910 hedge funds part of Insider Monkey’s database had bought Biogen Inc. (NASDAQ:BIIB)’s shares. Jim Simons’ Renaissance Technologies is the biggest investor out of these since it owns $316 million worth of shares.

The Walt Disney Company (NYSE:DIS), Biogen Inc. (NASDAQ:BIIB), Etsy, Inc. (NASDAQ:ETSY), and Zimmer Biomet Holdings, Inc. (NYSE:ZBH) are some undervalued wide moat stocks seeing high analyst price targets.

Click to continue reading and see 5 Undervalued Wide Moat Stocks To Invest In.

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Published on June 23, 2025 at by Inan Dogan, PhD

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

The AI infrastructure supercycle
The onshoring boom driven by Trump-era tariffs
A surge in U.S. LNG exports
And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

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Published on June 13, 2025 at by Insider Monkey Staff

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