There are many ways to look for promising stocks. But whether you like to see increasing sales, earnings growth, healthy cash flow, or expanding margins, Morningstar (NASDAQ:MORN) delivers.

The financial information company (and former employer of our very own Shannon Zimmerman), whose free services I use every day, reported 23% higher organic revenues year over year, for a total of $70.1 million. That's 32% higher if you include sales from newly acquired research firm Ibbotson.

Net earnings more than tripled, and free cash flow flipped from negative $3.3 million to a positive $9.1 million.

But there are flies in the ointment with a couple of these measurements. The revenues are growing but still small. Morningstar is currently trading at around seven times sales, which is approaching the neighborhood of growth phenomenon Hansen Natural (NASDAQ:HANS). And the cash flow gain excludes the Ibbotson transaction; if you prefer to think of acquisitions as capital expenditures, you need to back out $86.3 million from that figure.

The margins are what really impressed me here. There was nothing wrong with last year's operating margin of 13%, but a whopping 27% this quarter sounds even better. A 19% net profit margin also stomps the old 7.5% rate. This management team is clearly doing a great job of expanding revenues while keeping a lid on expenses.

All in all, we're looking at a thriving operation well into the profitable stage. The cash it generates is pumped back into growing the business, as with the Ibbotson deal, or through increasing R&D. And the balance sheet is squeaky clean, with an $83 million pile of cash and investments and no significant debt load.

If it wasn't for the lofty valuation, I'd say this would be a great candidate for our Motley Fool Hidden Gems newsletter, but I'm afraid the secret is out already. Morningstar has more than doubled its share price since going public for $18.50 a share on May 3, 2005. Happy belated birthday, Morningstar! You look ready to play with the big boys now.

Shannon Zimmerman may have once worked for Morningstar, but now he's back where he belongs at the Fool. If funds are your game, consider a free trial to his Motley Fool Champion Funds newsletter. That's where he separates the wheat from the chaff.

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Fool contributor Anders Bylund doesn't own any of the stocks mentioned, but he drinks a lot of that Monster stuff. A lot. Disclosure is as negotiable as the sun rising in the east.