Ebay, Express Scripts Advantages Demonstrate 'Why Moats Matter'

TheStreetJuly 21, 2014

Economic moats are sustainable competitive advantages which protect companies from rivals and they are also a shareholders best friend, said Heather Brilliant, author of "Why Moats Matter". The "moat" concept was first introduced by famed investor Warren Buffett, and now Morningstar is using it as the foundation of a stock-investing philosophy. Brilliant said the most powerful type of moat is the so-called network effect because it lifts the value of the business as the number of users increases, like in the case of Ebay. Brilliant is also bullish on Express Scripts, saying it has the low cost advantage in the PBM space and the stock has been unfairly beaten down to a cheap valuation.