UPDATE: Morningstar To Cover All Nasdaq OMX-Listed Cos.
June 08 2009 - 1:32PM
Dow Jones News
All the companies listed on the Nasdaq exchange will now be
covered by at least one research firm courtesy of the Nasdaq OMX
Group Inc. (NDAQ), including nearly 900 that currently don't get
any coverage at all.
Nasdaq OMX announced Monday it entered an agreement with the
Chicago-based independent research firm Morningstar Inc. (MORN) to
provide research that is primarily used by retail investors.
"Investors need to be able to access insightful and trusted data
and research to make investing decisions," Nasdaq Executive Vice
President Bruce Aust said in a press release. "Together, Nasdaq OMX
and Morningstar are filling a void that has existed for some time,
particularly among small- to mid-cap companies."
Morningstar analysts will produce research for more than 3,600
companies listed on Nasdaq OMX exchanges beginning in the third
quarter, according to the release. The research will include a
profile of the company and data and analyst research about the
industry. It won't include Morningstar's more detailed analyst
report, a Morningstar rating, or a buy/sell/hold
recommendation.
Without a deal between Morningstar and Nasdaq, more companies
might have joined the list of un- or under-covered companies after
the 2003 Global Analyst Research Settlement expires in July.
The settlement provided $460 million to fund independent
research from Morningstar and other firms over five years, funded
by a dozen Wall Street research firms who settled with regulators
over allegations their research analysts were pressured to promote
certain stocks by their investment banking departments.
The deal will help Morningstar, which is one of the larger
providers of independent research under the 2003 Global Analyst
Research Settlement, recoup some of the revenue it may have lost
after the settlement expires. The company has warned investors that
it expects its post-settlement revenue to be "significantly lower"
beginning in the second half of the year. Morningstar received $21
million in settlement monies in 2008 - about 4% of its consolidated
revenue last year.
Shares of Nasdaq fell 76 cents, or 3.45%, to $21.24 in recent
trading, while Morningstar shares declined 47 cents, or 1.1%, to
$42.18, in line with a decline in the broader market.
-By Ed Welsch, Dow Jones Newswires; 201-938-5244;
edward.welsch@dowjones.com