Pricing Power Stocks Warren Buffett once said: “If you have got the power to raise prices without losing business to a competitor, you have got a very good business. And if you need a prayer session before raising the price by a tenth of a cent, you have got a terrible business.” What Warren Buffett is referring to is a company’s pricing power, which is one of the best indicators of long-term competitive advantage. It is, however, not always that easy to spot a company with pricing power. A quick and easy method (but not exactly foolproof) to spot if a company has got pricing power is simply to observe its gross margin trend. When a company can raise its per-unit revenue faster than the associated cost, it does indicate a certain degree of pricing power. This will translate into stronger gross margins over time....