How about the Dow, Joe?

Joseph Mansueto, CEO and founder of mutual-fund research company Morningstar Inc., is building his index business. The Dow is for sale.

Will he bite?

"It certainly is doable," said Elliot Schlang, a Cleveland-based Soleil Securities Group Inc. analyst who includes Morningstar on his list of 30 Midwest stock picks. "I would not think it out of the realm of possibilities that Morningstar would at least have some interest."

Buying the granddaddy of stock market indexes — which News Corp. CEO Rupert Murdoch reportedly put on the block last month — would be a coup for Mr. Mansueto, making his Chicago company an instant powerhouse in an industry that generates hundreds of millions of dollars in revenue a year. The Dow Jones Industrial Average of 30 blue-chip companies, introduced in 1896 by Charles Dow himself, is the best-known barometer of stock market activity. Today, there are hundreds of indexes that bear the Dow name.

Mr. Murdoch bought the indexes as part of his $5.6-billion acquisition in 2007 of Dow Jones Inc., but they were never seen as core assets for the company, said Mike Simonton, a media analyst at Fitch Ratings in Chicago. The business makes money by licensing the Dow name to companies such as CME Group Inc., which use the indexes to build their own products, such as futures contracts or exchange-traded funds.

"It's a logical candidate for divestiture," Mr. Simonton said of the index business. A Dow Jones spokesman declined to comment.

Meanwhile, Mr. Mansueto, whose company has $323 million in cash and investments and no debt, has been on an acquisition tear. Last year, he bought six companies, paying a total of $105.5 million, mostly to build his database business. Morningstar's shares have fared relatively well this year, rising 31% to $46.50, more than the 16% gain in the Standard & Poor's 500 Index and the 10% gain in the Dow itself.

Mr. Mansueto declined to comment for this story, but he told Crain's Chicago Business in May that his preference for small acquisitions wouldn't keep him away from a large one if the right opportunity presented itself.

The Dow Jones indexes would be a stretch. Based on the $101 million of revenue it generated in the first nine months of 2007 — the last period for which public data is available — the business could be valued at as much as $950 million today, said John Neff, a Chicago-based analyst at William Blair & Co. That's about double Morningstar's current annual revenue, though the price tag could be smaller depending on which assets Mr. Murdoch decides to sell.

The most Morningstar has paid for an acquisition was $86.5 million for Ibbotson Associates Inc. in 2006, a figure that at the time represented about 37% of the company's yearly sales.

More-likely buyers include MSCI Inc., the index business that Morgan Stanley spun off last year, or McGraw Hill Cos., which owns the S&P indexes, Mr. Neff told investors in a note last month. Both are bigger than Morningstar — but both, unlike Morningstar, have substantial debt. Mr. Neff didn't mention Morningstar in his note. Bloomberg L.P. and NYSE Euronext Inc. also have been considered possible buyers, but they don't own indexes.

So far, Mr. Mansueto has built his index business from the ground up, except for a deal last year with MSCI that allows Morningstar to apply MSCI's methodology to its own database to calculate hedge-fund indexes for both firms.

In the first half, Morningstar generated $236.2 million in revenue. A "small percentage" of that figure is attributable to indexes, the company said.

Soleil Securities' Mr. Schlang cautions he has "no idea" if Mr. Mansueto is actually looking into a Dow deal, but points to Mr. Mansueto's track record.

"The management is very astute about making acquisitions," he said “and they've shown their ability to integrate them.”

Ann Saphir is a senior reporter at Crain's Chicago Business, a sister publication of Pensions & Investments