5-Star Stocks Poised to Pop: Morningstar (MORN)

5-Star Stocks Poised to Pop: Morningstar

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, investment research provider Morningstar (Nasdaq: MORN ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Morningstar's business and see what CAPS investors are saying about the stock right now.

Morningstar facts

Headquarters (Founded)	Chicago (1984)
Market Cap	$2.2 billion
Industry	Publishing
Trailing-12-Month Revenue	$490.6 million
Management	Founder/CEO Joe Mansueto CFO Scott Cooley
Return on Equity (Average, Past 3 Years)	17.7%
Cash/Debt	$360.7 million / $0
Competitors	Thomson Reuters Moody's (NYSE: MCO ) Standard & Poor's (a subsidiary of McGraw-Hill (NYSE: MHP ) )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 1,079 members who have rated Morningstar believe the stock will outperform the S&P 500 going forward. These bulls include ChrisFs and A6EIntruder.

Just last month, ChrisFs noted that Morningstar "recently purchased a small ratings agency." Our CAPS member concludes: "With a lack of trust in the big rating agencies (Moodys, S&P), Morningstar has a chance to build its own rating agency and rake some of that business."

Morningstar, best known for its independent mutual fund and stock research, has indeed been eyeing the credit-ratings space as a lucrative and timely source for strategic acquisitions. For example, Morningstar's $52 million purchase of RealPoint, a commercial mortgage-backed securities (CMBS) credit rating firm, helps fill a gap in the company's coverage, and comes at a time when confidence in Moody's and Standard & Poor's is at its lowest. In fact, CAPS members like A6EIntruder think Morningstar's trusted name is its biggest advantage:

I up-thumb it because it represents an outstanding brand with near-instant recognition among professional investors, and many serious amateurs.

Its rating system uses sound fundamentals analysis. Its name is trumpeted aloud in consumer-level advertising of stocks and funds.

Anyone can do securities analysis, but few can achieve what Morningstar has in size, scope, and credibility. This is a company that will endure and thrive because it sells trusted intelligence -- and you can't get a wider moat than that.

What do you think about Morningstar, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Morningstar and Moody's are Motley Fool Stock Advisor picks. Moody's is also an Inside Value choice, and Motley Fool Options has recommended a stock repair position on it. The Fool owns shares of Morningstar. The Fool's disclosure policy always gets a perfect score.

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