1 Highly Underrated Moat in Growth Stocks
When it comes to moats, most investors think of advantages like network effects or superior brand recognition. And while those are both very strong competitive edges, there is one underrated moat that can create an incredible advantage for many of today's high-growth companies.
It's called switching costs.
Think of switching costs as the hoops a customer has to jump through to switch to a competitor's product. It could be as simple as paying a fee to get out of a contract like with cellphone service providers or as complicated as reorganizing an entire company's internal processes when switching integral software products like customer relationship management (CRM) tools.
Source Fool.com
