Morningstar: 5 Different Insiders Have Sold Shares This Month

Nov.21.13 | About: Morningstar, Inc. (MORN)

In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Morningstar (NASDAQ:MORN) provides independent investment research to investors worldwide.

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Insider selling during the last 30 days

Here is a table of Morningstar's insider-trading activity during the last 30 days.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Steven Kaplan Director Nov 19 2,000 Yes 54,729 shares 3.5%
Jack Noonan Director Nov 18 1,000 Yes 58,917 shares + 1,000 options 1.6%
Richard Robbins General Counsel Oct 29-Nov 12 2,000 Yes


David Williams Head of Design and Marketing Oct 28-Nov 8 27,867 Yes 39,350 shares + 2,133 options 40.2%
Bevin Desmond Head of Global Markets and Human Resources Oct 28-Nov 11 40,000 Yes 75,598 shares 34.6%
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There have been 72,867 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Morningstar's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
November 2013 33,286 0
October 2013 40,581 0
September 2013 3,000 0
August 2013 1,000 0
July 2013 3,880 0
June 2013 11,000 0
May 2013 12,000 0
April 2013 2,000 0
March 2013 10,000 0
February 2013 23,000 0
January 2013 21,250 0
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There have been 160,997 shares sold and there have been zero shares purchased by insiders this year. The month of October has seen the most insider selling.


Morningstar reported the third-quarter financial results on October 23 with the following highlights:

Revenue $173.5 million
Net income $31.5 million
Cash $342.9 million
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Morningstar's competitors include Standard & Poor's, a division of The McGraw-Hill Companies (MHFI), and Thomson Reuters (NYSE:TRI). Here is a table comparing these companies.

Market Cap: 3.89B 19.85B 31.47B
Employees: 3,490 16,687 60,000
Qtrly Rev Growth (yoy): 0.08 0.07 -0.03
Revenue: 688.38M 4.85B 12.93B
Gross Margin: 0.70 0.68 0.27
EBITDA: 213.36M 1.75B 2.88B
Operating Margin: 0.24 0.33 0.14
Net Income: 120.06M 828.00M 909.00M
EPS: 2.68 3.50 1.11
P/E: 31.63 20.96 34.31
PEG (5 yr expected): 2.03 1.22 9.41
P/S: 5.66 4.09 2.43
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Morningstar has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities during the last six months.

Company Insider buying / shares Insider selling / shares
MHFI 2,500 48,670
TRI 557,115 42,531
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Only Morningstar has seen intensive insider selling during the last 30 days.


There have been five different insiders selling Morningstar and there have not been any insiders buying Morningstar during the last 30 days. Two of these five insiders decreased their holdings by more than 10%. Morningstar has an insider ownership of 55.20%.

Morningstar is trading at a P/E ratio of 31.63, and a forward P/E ratio of 26.60. The company has a book value of $16.46 per share, and the stock has a dividend yield of 0.59%.

Before entering short Morningstar, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are relatively high P/S ratio and the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.