3 Unstoppable Stocks to Buy in 2026 and Hold Forever: A Value Investor's Perspective

The starting point for any disciplined investor is a clear philosophy, and mine is simple: buy exceptional, durable businesses with wide moats at prices offering a meaningful margin of safety. This isn't about chasing the latest trend; it's about finding quality at a discount. The market's 17% rally in 2025 has left the US stock market trading 4% below Morningstar's fair value estimate. That gap, however small, represents the potential margin of safety we seek. It suggests the market, for all its recent strength, still offers a foothold for patient capital.

The core principle, as I see it, is avoiding losing money. This requires emotional resilience to withstand the inevitable declines. As Charlie Munger famously argued, if you can't stomach a 50% drop in your portfolio, you're not fit to be a common shareholder. This isn't a theoretical exercise. Even the strongest companies-Berkshire Hathaway, Amazon, Apple-have faced such drops. The test is whether you can stay the course, trusting the fundamentals, when the headlines scream fear. Preparation is everything: a diversified portfolio, some liquidity, and a plan that doesn't require perfection.

Given this setup, where do we look for high-quality companies trading at a discount? The Morningstar Wide Moat Focus Index is a fertile hunting ground. It tracks companies with a wide economic moat-meaning they possess significant, sustainable competitive advantages-and whose stocks are trading at the lowest current market prices relative to Morningstar's fair value estimates. In other words, it's a systematic way to find durable businesses that the market may be overlooking. The index's regular reconstitution ensures it stays focused on the least-expensive high-quality stocks, making it a valuable filter for long-term investors.

The thesis for 2026, therefore, is to use this framework. We seek the wide-moat companies within this index, or others that meet the same criteria, that are trading at a significant discount to their intrinsic value. The market's recent gains have narrowed the field, but they haven't closed it. The work now is to identify the few exceptional businesses where the margin of safety is still wide enough to justify a permanent holding.

Stock 1: Adobe (ADBE) - The Software Moat

Adobe's position in the software world is built on a fortress. Its Creative Cloud and Document Cloud platforms are not just products; they are the standard. For professionals and enterprises, the tools are deeply embedded in workflows, creating immense switching costs. This is the essence of a wide economic moat-a durable competitive advantage that protects profits and ensures long-term compounding. The company's ability to command recurring subscription revenue from this entrenched user base is a hallmark of a business designed to last.

Yet, the market's recent view of Adobe has been one of caution. The stock trades at a 67% implied upside according to Morningstar's analysis, a discount that suggests investors are weighing the company's strengths against emerging headwinds. The primary concern is execution. Adobe is aggressively integrating artificial intelligence into its suite, a move necessary to maintain its leadership. The risk is that in a crowded software market, it must not only innovate but also preserve its pricing power. Any stumble in this AI transition or a perceived loss of its premium brand could erode the very moat that justifies its valuation.

The bottom line for a value investor is the margin of safety. A 67% implied upside is substantial, but it is not a free pass. It reflects a market that is skeptical about Adobe's ability to navigate the next phase of technological disruption while maintaining its premium position. The company's history of disciplined execution and its dominant platform give it a strong foundation. The test now is whether its management can successfully leverage AI to deepen its moat, not just defend it. For patient capital, the current price offers a compelling entry point, but the investment thesis hinges entirely on flawless execution.

Stock 2: Palo Alto Networks (PANW) - The Cybersecurity Fortress

Palo Alto Networks operates in a business with a classic wide moat. Its security platforms are deeply embedded in enterprise IT stacks, creating high switching costs. In a world where cyber threats are a constant, companies are less likely to cut a foundational security product during cost rationalization. This stickiness, combined with a network effect from its platform approach, forms a durable competitive advantage that protects profits over the long cycle.

The market, however, has been unimpressed. The stock has been flat in 2025, and it currently trades at a 17% discount to our $225 fair value estimate. This gap suggests investors are discounting the company's execution risks and a slower sales environment. The core investment case rests on whether Palo Alto can successfully navigate these challenges while maintaining its growth trajectory.

The path to improved profitability is clearly mapped. Management targets adjusted free cash flow margins of 40% or more by fiscal 2028, up from 38% in fiscal 2025. This guidance is a key signal. It implies that the company's two major acquisitions will not be margin-dilutive over the medium to long term, and that its land-and-expand model will drive operating leverage as software becomes a larger part of the mix.

The primary risk, then, is execution. The company must seamlessly integrate its acquisitions, particularly the ambitious proposed purchase of CyberArk, without disrupting its financial targets. It also needs to continue convincing customers of its platform's value in a more cautious spending climate. The cybersecurity market is dynamic, and Palo Alto must avoid being outmaneuvered by agile upstarts.

For a value investor, the setup is a classic one: a wide-moat business trading at a discount, with a clear plan to improve returns. The margin of safety here is the 17% gap to fair value, but it is contingent on flawless execution of a complex growth strategy. If management delivers, the stock's current price offers a compelling entry point into a fortress that is likely to compound for years.

Stock 3: Constellation Brands (STZ) - The Consumer Defensive Anchor

Constellation Brands offers the classic value investor's dream: a wide-moat business in a defensive sector, trading at a deep discount. Its moat is built on two pillars: a powerful portfolio of consumer brands and an entrenched distribution network. The company's crown jewels, Corona and Modelo, are not just popular-they are cultural staples in the US beer market, commanding premium pricing and fierce loyalty. This brand strength, combined with its scale in distribution, creates a durable competitive advantage that protects profits through economic cycles. In the beverage alcohol sector, this is the definition of a wide economic moat.

The market's skepticism is captured in a stark valuation gap. As of late September 2025, Constellation was trading 41% below our fair value estimate. That's a substantial margin of safety for a cash-generative business with a defensive profile. The Morningstar Wide Moat Focus Index, which seeks precisely these discounted high-quality stocks, highlighted Constellation as its most undervalued name at that time. For a patient investor, this price offers a compelling entry point into a business designed to compound over decades.

The primary risk to this thesis is macroeconomic. The company's premium brands are sensitive to consumer spending pullbacks. During periods of economic uncertainty, discretionary purchases like premium beer and wine are often the first to be cut. This creates a direct link between the broader economy and Constellation's top and bottom lines. The long-term shift away from beer consumption, driven by changing demographics and health trends, adds another layer of pressure. If this trend accelerates, it could challenge the pricing power that underpins the company's premium brand strategy.

The bottom line is one of classic value investing tension. Constellation possesses a wide moat and trades at a deep discount, but it faces secular headwinds and cyclical vulnerability. The investment case hinges on the durability of its brand moat against these pressures. For now, the price offers a wide enough margin of safety to warrant a long-term holding, but it is not a bet on a flawless economic environment. It is a bet on the strength of its brands and the resilience of its distribution, which have served it well through past cycles.

Practical Takeaways and Watchpoints

The strategy is clear. Buy exceptional, durable businesses with wide moats at prices offering a meaningful margin of safety. This principle has powered long-term compounding for generations of investors. The Morningstar Wide Moat Focus Index provides a systematic way to find these discounted high-quality stocks, and our three picks-Adobe, Palo Alto Networks, and Constellation Brands-exemplify the approach. The practical takeaway is to implement this framework: identify the few companies where quality is undervalued, and then hold them through the inevitable cycles.

For each holding, the key watchpoint is execution on its strategic initiatives. These are not passive investments; they require monitoring to ensure the company is navigating its specific challenges. For Adobe, the critical test is its AI integration. The market is pricing in a 67% implied upside, but that assumes flawless execution in deepening its moat with new technology. Watch for progress in embedding AI into Creative Cloud and Document Cloud without eroding its premium brand or pricing power. For Palo Alto Networks, the focus is on margin targets. The stock trades at a 17% discount, but management's guidance for adjusted free cash flow margins of 40% or more by fiscal 2028 is the proof point. Monitor the integration of its acquisitions, particularly the proposed CyberArk deal, and the company's ability to maintain growth while improving returns. For Constellation Brands, the watchpoint is brand performance amid secular headwinds. The stock trades 41% below fair value, a deep discount that reflects macro and demographic risks. Track the resilience of its premium brands like Corona and Modelo, and whether its distribution moat can offset any pullback in discretionary spending.

The ultimate test for any of these investments is not quarterly earnings beats, but the company's ability to compound earnings and cash flow over decades. This is the core of the value investor's discipline. The market's short-term noise-whether it's a flat stock price or a macroeconomic forecast-should be treated as irrelevant. What matters is whether the business is strengthening its competitive position and generating more cash for shareholders over the long term. By focusing on execution, monitoring the key catalysts, and staying patient, investors can turn the principle of buying quality at a discount into a powerful engine for lasting wealth.