15 New 5-Star Stocks This Week

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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star

. For the week ended March 13, 33 stocks saw their ratings change to 4 stars, while 15 joined the 64 US-listed names in 5-star territory.

The five new 5-star stocks with the largest market capitalization are:

• Mondelez International MDLZ
• Diageo DEO
• Otis Worldwide OTIS
• Fair Isaac FICO
• Ares Management ARES

The full list of new 5-star stocks can be found at the bottom of this story. All returns in this article are reported in the stock’s base currency and all data is sourced from Morningstar Direct.

What Is the Morningstar Rating for Stocks?

The Morningstar Rating can help investors identify stocks that are truly undervalued or overvalued, cutting through the market noise. The rating is determined by three factors: a stock’s price, its

—Morningstar’s estimate of its intrinsic worth—and its , which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.

The Latest Stock Valuation Changes

The Morningstar US Market Index fell 1.60% over the past week as of March 13, leaving the overall US stock market significantly undervalued, hovering at a 10% discount to its fair value estimate on a market cap-weighted basis.

Of the 829 US-listed stocks covered by Morningstar analysts:

• 40% are undervalued, 41% are fairly valued, and 19% are overvalued.
• 33 are newly undervalued.
• Six are newly overvalued.
• 15 moved from a 4-star rating to a 5-star rating.
• One moved from a 5-star rating to a 4-star rating.
• None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
• Nine are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Mondelez International

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $75.00
• Uncertainty Rating: Low

Confectioner Mondelez dropped 6.01% over the past week. The company’s stock is up 2.52% over the past three months and is down 12.47% over the past year. The stock’s fair value estimate rose to $75 per share from $73 during the week. It ended the week trading at a 27% discount to its new fair value estimate, with an Uncertainty Rating of Low. The mid-core stock has a wide economic moat.

Diageo

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $116.00
• Uncertainty Rating: Medium

Following a 5.42% loss over the past week, alcoholic beverages company Diageo saw its Morningstar Rating move to 5 stars from 4. Diageo has lost 13.16% over the past three months and 26.48% over the past year. The large-value stock has a wide economic moat. Diageo is trading at a 33% discount to its fair value estimate of $116 per share, with an Uncertainty Rating of Medium.

Otis Worldwide

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $110.00
• Uncertainty Rating: Low

Specialty industrial machinery firm Otis lost 6.76% over the past week, shifting its Morningstar Rating to 5 stars from 4. Otis has dropped 5.17% over the past three months and 14.93% over the past year. The stock is trading at a 24% discount to its fair value estimate of $110 per share, with an Uncertainty Rating of Low. Otis is a mid-value company with a wide economic moat.

Fair Isaac

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $2,020.00
• Uncertainty Rating: High

Following a 23.36% loss over the past week, software application firm Fair Isaac saw its Morningstar Rating move to 5 stars from 4. Fair Isaac has lost 38.69% over the past three months and 35.12% over the past year. The mid-growth stock has a wide economic moat. Fair Isaac is trading at a 44% discount to its fair value estimate of $2,020 per share, with an Uncertainty Rating of High.

Ares Management

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $180.00
• Uncertainty Rating: High

Asset management firm Ares dropped 7.50% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 41.05% over the past three months and 25.42% over the past year. The stock’s price is 43% below its fair value estimate of $180 per share, with an Uncertainty Rating of High. The mid-growth stock has a narrow economic moat.