Morningstar, Inc. $MORN Shares Sold by Redmond Asset Management LLC

Key Points

• Redmond Asset Management cut its Morningstar stake by 70.1% in the third quarter, selling 5,385 shares and retaining 2,296 shares valued at approximately $436,000. Institutional investors collectively own 57.02% of MORN.
• Morningstar reported better-than-expected third-quarter results, with revenue rising 8.9% year over year to $672.1 million and adjusted EPS reaching $3.48 versus the $3.04 consensus estimate. Operating income increased 31%, supported by growth in its Credit and Retirement businesses.
• Despite strong earnings and a “Moderate Buy” analyst consensus with an average price target of $235.67, insider selling remains a potential concern; insiders sold 86,500 shares worth $17.8 million during the latest quarter, with no reported insider purchases.

Redmond Asset Management LLC lowered its position in Morningstar, Inc. (NASDAQ:MORN - Free Report) by 70.1% in the third quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 2,296 shares of the business services provider's stock after selling 5,385 shares during the quarter. Redmond Asset Management LLC's holdings in Morningstar were worth $436,000 at the end of the most recent quarter.

Several other hedge funds and other institutional investors have also made changes to their positions in MORN. Bamco Inc. NY purchased a new stake in shares of Morningstar in the 2nd quarter worth about $545,937,000. BlackRock Inc. purchased a new position in Morningstar during the 2nd quarter valued at about $324,792,000. Dimensional Fund Advisors LP raised its position in Morningstar by 9.7% during the first quarter. Dimensional Fund Advisors LP now owns 517,769 shares of the business services provider's stock worth $87,514,000 after acquiring an additional 45,798 shares during the last quarter. Renaissance Technologies LLC raised its position in Morningstar by 38.6% during the first quarter. Renaissance Technologies LLC now owns 448,870 shares of the business services provider's stock worth $75,881,000 after acquiring an additional 125,100 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership lifted its holdings in shares of Morningstar by 38.5% in the first quarter. Arrowstreet Capital Limited Partnership now owns 394,931 shares of the business services provider's stock valued at $66,763,000 after purchasing an additional 109,833 shares in the last quarter. Institutional investors and hedge funds own 57.02% of the company's stock.

Insider Transactions at Morningstar

In related news, Chairman Joseph Mansueto sold 5,659 shares of the firm's stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $218.84, for a total transaction of $1,238,415.56. Following the sale, the chairman owned 7,938,192 shares in the company, valued at approximately $1,737,193,937.28. This trade represents a 0.07% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 86,500 shares of company stock worth $17,824,451 in the last quarter. 38.80% of the stock is currently owned by company insiders.

Morningstar News Summary

Here are the key news stories impacting Morningstar this week:

• Positive Sentiment: Q3 earnings and revenue exceeded expectations. Morningstar reported revenue of $672.1 million, up 8.9% year over year and above the $664.75 million consensus estimate. Adjusted EPS of $3.48 also surpassed expectations of $3.04. Morningstar quarterly earnings report
• Positive Sentiment: Profitability improved sharply. Operating income rose 31.0% to $167.4 million, while reported diluted EPS increased 41.0% to $3.06. The quarterly margin reached approximately 28.3%, reinforcing the case that Morningstar is converting revenue growth into faster earnings growth. Morningstar Q3 revenue and earnings results
• Positive Sentiment: Growth remained broad-based. Morningstar Credit revenue increased 18.3%, while Morningstar Retirement revenue rose 21.3%. Morningstar Credit and the Morningstar Direct Platform were identified as the largest contributors to organic revenue growth. The company also repurchased approximately $100 million of stock during the quarter. Morningstar Q3 earnings growth announcement
• Positive Sentiment: UBS maintained a Buy rating and a $260 price target. Analyst Alex Kramm cited strong earnings and margin expansion, while raising the EPS outlook. The unchanged target implies additional upside based on the stock’s recent trading level. UBS Morningstar rating
• Neutral Sentiment: Morningstar’s fund-flow analysis showed $32 billion leaving U.S. stock funds in September, including $17 billion from large-growth funds. This highlights cautious investor behavior, but the data concerns the broader fund market rather than Morningstar’s operating performance. Morningstar fund-flow analysis
• Negative Sentiment: Insider activity remains a potential overhang: reported transactions showed no insider purchases and substantial selling over the past six months, including sales by Executive Chairman Joseph Mansueto. Operating cash flow and free cash flow also declined modestly year over year. Morningstar insider activity and cash flow report

Morningstar Price Performance

NASDAQ:MORN opened at $222.54 on Friday. Morningstar, Inc. has a 12-month low of $141.49 and a 12-month high of $226.29. The firm has a market cap of $8.35 billion, a price-to-earnings ratio of 17.23 and a beta of 1.02. The company's 50-day moving average is $205.72 and its two-hundred day moving average is $186.16. The company has a current ratio of 1.06, a quick ratio of 1.06 and a debt-to-equity ratio of 1.66.

Morningstar (NASDAQ:MORN - Get Free Report) last issued its quarterly earnings results on Wednesday, October 28th. The business services provider reported $3.48 EPS for the quarter, topping analysts' consensus estimates of $3.04 by $0.44. The business had revenue of $672.10 million during the quarter, compared to the consensus estimate of $664.75 million. Morningstar had a net margin of 17.00% and a return on equity of 44.52%.

Analyst Ratings Changes

Several analysts have issued reports on MORN shares. BMO Capital Markets upped their price target on shares of Morningstar from $230.00 to $237.00 and gave the company an "outperform" rating in a report on Tuesday, October 13th. Wall Street Zen raised shares of Morningstar from a "hold" rating to a "buy" rating in a research note on Saturday, September 26th. UBS Group cut their price objective on Morningstar from $280.00 to $260.00 and set a "buy" rating for the company in a research report on Tuesday, July 7th. Finally, Weiss Ratings upgraded Morningstar from a "hold (c-)" rating to a "hold (c)" rating in a research report on Friday, October 9th. Two research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average price target of $235.67.

Morningstar Profile

Morningstar, Inc is a global provider of independent investment research, data, and financial technology. The company serves asset managers, financial advisors, institutions, retirement plans, and individual investors with information designed to support investment analysis and decision-making.

Its products and services include research and ratings on mutual funds, exchange-traded funds, stocks, bonds, and other investments; portfolio analysis and planning tools; investment-management and advisory services; and software and data solutions for financial professionals and institutions.

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