Morningstar Deal with OTC Markets Brings Investors Ratings and Reports

OTCQX and OTCQB listed companies are part of the new deal with Morningstar.

The operator of emerging Alternative Trading System (ATS) in the US capital markets, OTC Markets Group Inc, listed on its OTCQX venue under ticker OTCM, has today announced an agreement with Morningstar Inc (NASDAQ: MORN) that will enable related research reports and equity ratings to be issued on OTCQX and OTCQB listed companies and their investors.

The company already has nearly 10,000 listed firms on its platforms via its FINRA-regulated subsidiary OTC Link LLC which operates OTC ATS for its three venues. The deal with Morningstar is a step forward as the company aims to further enhance its operations by providing investors of certain of its public companies additional tools such as research and ratings – while at the same time making it easier for public companies to highlight themselves.

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Morningstar is a leading provider of independent investment research and its quantitative equity ratings will be available on public companies that are traded on OTCQX and certain of OTCQB companies that opt-in, including on each company’s quote page, as part of the agreement and as described below.


“OTCQX and subscribing OTCQB companies can, likewise, use these ratings and research reports to garner interest from investors.”


Quantitative research

The addition of the reseach related features will help provide investors with Morningstar’s estimates of a companies fair market value as reflected in a firm’s stock price, and will included the use of a rating system.  For example, an undervalued stock with a good value price is given as many as 5 stars, whereas an overvalued stock that is overpriced would carrying a lower rating down to 1 star – indicating its potentially overbought.

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Retail and/or institutional investors may use such research data when making decisions whether related to long term investing or day-trading or everything in between, as part of the due diligence process to research potential investment or trading opportunities, as is common in US capital markets on certain ATS venues or national market system (NMS) regional exchanges.

The quantitative reports that pull numbers from the public companies including their reported metrics and financials are presented as a file that is updated daily and available for investors to download or view, in order to better assess companies current and/or historical performance rankings, including any forecasts or analysis from Morningstar. According to the press release, these reports will be free for companies listed on OTCQX, and for a small annual fee to companies traded on OTCQB.

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Selling point for listed companies

Jason Paltrowitz Source: LinkedIn
Jason Paltrowitz
Source: LinkedIn

Commenting in the official press release, Jason Paltrowitz, Executive Vice President of Corporate Services at OTC Markets Group added, “The addition of quantitative Morningstar equity ratings and equity research reports for OTCQX and OTCQB companies will provide investors with an independent, quantitative valuation of stocks on our premium markets so they can make more informed investment decisions.”

Mr. Paltrowitz concluded: “OTCQX and subscribing OTCQB companies can, likewise, use these ratings and research reports to garner interest from investors. We’re thrilled to announce this agreement with Morningstar, which further deepens the body of research and tools available to OTCQX and OTCQB companies and their investors.”

Capital raising and fintech

The news follows after OTC Markets had hosted a capital raising workshop at their New York headquarters that Finance Magnates had attended, which featured discussions about Blockchain companies and how the tail-end of the US JOBS Act kicking in this month is set to potentially change the US capital markets playing field. Below is a picture from that event, which featured a number of speakers from across capital raising, broker-dealer, legal and blockchain related companies.

Morningstar provides data on more than 500,000 investment offerings spanning nearly every asset class including foreign exchange from over 260 sources, and real-time market data on over 15 million equities (among other business the company is involved with), and accordingly is sought by early-stage fintech startups that need financial data to feed into their mobile or web-based applications. Morningstar recently sponsored and exhibited at Empire Startups New York Fintech conference that Finance Magnates had also reported about at the end of last month.


Source: photo by Steven Hatzakis
Source: photo by Steven Hatzakis
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