Morningstar encouraged investors to keep watch on companies with sustainable competitive advantages - economic moats - and be ready to buy when they fell into positive recommendation territory.
''At the right price, moat companies are more likely to generate healthy investor returns because of the ability to invest at returns higher than the cost of capital and thereby create value over time.''
Value remained difficult to find in New Zealand but there were now a few more opportunities in which to invest following the pull-back in share prices along with the global market since late May, Mr Moghe said.
Only one of Morningstar's recommendations was positive in March - telecommunications infrastructure owner Chorus. But now there were two, Chorus and electricity generator and retailer TrustPower.
''Despite not having a moat, we think regulatory concerns are overdone and TrustPower has the best growth prospects in the sector through expansion of Australian wind power.''
Morningstar always looked to buy at meaningful discounts to fair value to reduce the chances for capital loss and enhance the improvement, Mr Moghe said.
Given the lack of value available, investors seeking to buy shares could consider lower-certainty companies trading around fair value and offering higher-than-average sustainable yields.
He recommended the Kiwi Income Property Trust, which stood out as providing a relatively high degree of certainty regarding earnings and distributions.
The key driver of earnings was the portfolio of retail shopping centres, which benefited from high occupancy and rent growth, ongoing demand being supported by growing sales and productivity for specialty tenants. The key challenge was loss of retail sales to internet retail sales but that was seen as only hurting discretionary retail categories such as apparel and department stores, he said.
Healthcare and telecommunications sector head Peter Rae covered three New Zealand healthcare stocks - Ryman Healthcare, Fisher and Paykel Healthcare and the Ebos Group.
''We think the longer-term prospects for the sector are bright as expenditure on healthcare is expected to outpace GDP growth over the longer term because of an ageing population.''
Utilities looked attractive, but the threat of regulation loomed.
The utilities sector encompassed firms that generated, retailed and distributed electricity.
Recent falls in electricity company shares meant the discount to fair value was 10% on average. Morningstar had lifted its uncertainty rating for the sector from medium to high to reflect the threat of regulation.
That followed the Labour Party's proposal, with support from the Greens, to regulate electricity prices it if formed the next government, Mr Rae said.
The telecommunications sector was undervalued. While Telecom's share price was trading at a similar level to the previous quarter, it had been volatile. Demand for defensive yield stocks saw the company rally 15%, but gains were given up just as quickly over concerns of the potential tapering of quantitative easing in the United states.
Telecom's immediate focus in the short term remained on costs. Stabilisation of revenue and margins was the focus for 2014 and 2015 and growth was expected from 2016 onwards.
''We believe customer service, mobile network quality and bundling are key differentiations for telecoms in the future as fixed products are largely commoditised,'' Mr Rae said.
