Are Morningstar shares too richly priced? Industry insiders have pointed to the Chicago fund firm's three recent purchases as evidence that the firm's stock is trading at a relatively high price. Meanwhile, an article in the Wall Street Journal noted that nine company insiders are filing to sell shares. Some investors track insider sales to glean clues as to insider's opinions of the value of a stock.

Still, insiders often sell shares for personal reasons that are unrelated to the valuation. Morningstar, which recently went through an IPO, was also privately held for two decades, a situation that may have built up the incentives for insiders to sell now that their is a market for their shares.

The WSJ's coverage was sparked by Morningstar's decision to include more information on insider sales as part of a quarterly report it filed last week. A table in the report shows that two directors and seven executives plan to sell shares.

Founder Joe Mansueto also filed to sell 700,000 shares.

Meanwhile, fund industry insiders are buzzing about the steep prices the firm paid for its two most recent additions -- Ibbotson Associates and Altvest, a database of investment manager performance it picked up from InvestorForce. Morningstar paid some $10 million for the database which will be used to build out its institional manager tracking product line.

Last month it also paid $22 million to purchase Aspect Huntley, an Australian publisher.

Observers note that Morningstar's stock, which trades at much higher multiples than its target's shares are worth, is allowing it to build out its business in a way that uses relatively little capital. As they say in the midwest, make hay while the sun shines.  

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE