Motley Fool Stock Advisor recommendation Moody's (NYSE:MCO) has been a perfect pick. In three and a half years, the company's steady growth has sent the stock on a smooth ride to a 170% gain, handily beating the 3% posted by the S&P 500 in the same time.

Its third-quarter results, announced Wednesday, show why this stock has performed so well. Revenue, compared with the comparable quarter last year, was up 18%, and operating income followed suit with a solid 17%. All major business lines saw growth, with most achieving double-digit percentage increases.

The company boosted 2005 guidance "modestly above" its second-quarter projections. Much stronger growth is expected at Moody's Investors Service, while there will be weaker-than-projected growth in the U.S. corporate finance business and U.S. financial institutions sector. In all, Moody's expects pro forma fiscal 2005 earnings per diluted share to grow 16% to 19% -- above the annual 15% rate that analysts expect in compound earnings over the next five years. But investors should keep in mind that this pro forma estimate does not include the expensing of stock options, which is expected to have an impact of $0.11 to $0.12 per diluted share, as much as a 50% increase from the impact in 2004.

The company also announced a new $1 billion share repurchase program. Since going public in 2000, Moody's has spent $1.4 billion on its own shares. To its credit, though, it is straightforward in that 30.5 million of the shares purchased -- slightly more than half -- offset shares issued under employee stock plans.

Stock options and other estimates aside, the company's balance sheet is a thing of beauty. The company's cash and short-term investments have grown by $200 million since the beginning of the year and now exceed debt obligations by almost $300 million. In the kind of parallelism rarely found in corporate America, it just makes sense that a credit rating service would have a rock-solid balance sheet.

All of this success comes at a price, however. The stock trades for 28 times estimated 2006 earnings -- not cheap at all when you consider that its long-term growth rate is 15%. Investors who have ridden this excellent company to today's returns should consider selling a small percentage of this holding now and investing it in more modestly valued business services companies, such as Motley Fool Inside Value pick Accenture (NYSE:ACN), which trades at 15 times forward earnings with a long-term estimated growth rate of 14%, or Stock Advisor recommendation Corporate Executive Board (NASDAQ:EXBD), which is trading at 40 times forward earnings but with a growth estimate of nearly 30%.

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Fool contributor W.D. Crotty owns no shares in any companies mentioned above. Click here to see The Motley Fool's disclosure policy.