It's good to be King.

Moody's Corporation (NYSE:MCO), one of the dominant credit rating agencies, along with McGraw-Hill's (NYSE:MHP) Standard & Poor's and Fitch, reported boffo third-quarter results. Earnings per share came in well above expectations at $0.56, while revenues, assisted by exceedingly strong performance in its corporate finance business, jumped 23% over last year.

Earnings would have been even better had the company's tax rate not risen to 44.2% for the quarter, up from 41.5%. Moody's had to back out deductions taken in previous quarters on certain royalty payments after New York passed legislation in October disallowing them, retroactive to the beginning of the year. As such, what was a great quarter would have been even better without this one-time event.

Moody's is one of those nearly unbreakable franchises, similar to the big accounting firms, Dun & Bradstreet (NYSE:DNB), or even Coke (NYSEL KO) & Pepsi (NYSE:PEP). Whenever financial transactions occur, the third-party source that holds the most weight is Moody's. This was one of the reasons Tom Gardner selected the stock for Motley Fool Stock Advisor last year. Knocking Moody's off of its pedestal would be incredibly difficult.

During the quarter, Moody's repurchased more than 1.2 million shares at a cost of about $64 million, or $53.30 per share. Given the stock's rapid rise, this is somewhat surprising. Moody's explanation is that it bought back to offset shares issued under an employee stock option plan (which the company expenses, to its credit). While limiting share dilution is admirable in theory, the use of shareholder equity to do so is not necessarily, unless management is certain that the shares are underpriced.

A share repurchase at these prices means one of two things -- either management thinks the shares are still undervalued at current prices, or they repurchase without regard to price. A total lack of buys by insiders suggests that the former is not the case. Given the modest size of Moody's option program, this is not a huge issue, but to my mind any inefficient use of shareholder equity is cause for concern.

The stock, up more than 40% since Tom Gardner recommended it in Stock Advisor, has reached what I consider the upper range of its fair value. After such a powerful move up, certain unavoidable facts about the business get in the way: Moody's is not a fast grower, and its business is quite consistent and fairly predictable.