In this month’s Covered Call Corner, I expanded the search to include Morningstar’s “Narrow Moat” companies as well as the typical “Wide Moat” companies because there were so few Wide Moat firms on the list. (For more information about how and why the Covered Call Corner spreadsheet is set up, please see this article.)
The structural influences are different for Wide versus Narrow Moat stocks at Morningstar. Morningstar has sold the rights to its “Wide Moat Index” to be turned into an ETF (with a ticker of MOAT). As such, decisions about the fair value estimate of Wide Moat stocks tends to be much more heavily scrutinized. If an analyst makes a 5-star call on a Narrow Moat stock, his personal reputation is partly at stake; if an analyst makes a 5-star call on a Wide Moat stock, it is Morningstar’s reputation that is at stake!
As I was compiling the data, I realized there were several issues with very large bid-ask spreads. For these, rather than choosing the bid price for the spreadsheet, I used the settlement price.
IOI Covered Call Corner for 31 March, 2016
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