By Cydney Posner

Nasdaq has just announced that it has entered into an agreement  with Morningstar, which provides independent investment research, to provide equity research profile reports on more than 3,600 NASDAQ OMX-listed companies, at no cost to the issuer. The absence of research coverage (or the fear thereof) has been especially important for many small- and mid-cap companies that have seen their research coverage shrink or disappear altogether. Nasdaq reports that there are currently approximately 1,400 public companies in the U.S. that do not have any research coverage. The WSJ reports that the problem of companies without research coverage has accelerated as Wall Street banks, increasingly viewing their research departments as major cost centers, have thinned the ranks of analysts.

According to the press release, the Morningstar Profile Report will include a lengthy company profile, comprehensive data about the company and its industry, and industry context written by a Morningstar analyst. The profile will, however, not amount to full analyst coverage as it does not include Morningstar's more detailed analyst research report, a Morningstar Rating or a buy/sell/hold recommendation. The Morningstar Profile Reports are expected to be published beginning in the third quarter, will be updated daily and be available on NASDAQ OMX's websites, Nasdaq Online and through Nasdaq.com as well as in most of Morningstar's key platforms.

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