On Mar 25, 2013, shares of
Intercontinental Exchange, Inc
) hit a 52-week high of $163.81. Previously, the company had
reported fourth-quarter results with an earnings surprise of
5.1%. This securities exchange witnessed positive earnings
surprises in three of four quarters in 2012, with an average beat
On Feb 6, Intercontinental Exchange reported fourth-quarter 2012
operating income of $1.84 per share, surpassing the Zacks
Consensus Estimate of $1.75 and year-ago earnings of $1.76 per
share. Results reflect lower-than-expected expenses and low tax
rate that helped maintain the margins and cash flow growth.
In mid-March, Intercontinental Exchange announced its intention
to launch four credit index futures (CDX), which will be based on
the Markit CDX and Markit iTraxx indices. CDX are contracts that
offer greater efficiency in credit risk management while hedging
in the corporate credit market.
Moreover, the acquisition of
NYSE Euronext, Inc.
) announced in Dec 2012 is expected to help Intercontinental
Exchange emerge as one of the strongest players in the exchange
industry, upon successful culmination in 2013.
Valuation for Intercontinental Exchange looks reasonable. The
shares are trading at a 4.2% premium to the peer group average
and in line with the peer group average on price-to-earnings
basis. Return on equity is also in line with the peer group
average. The 1-year return from the stock is 16.1%, much above
S&P's return of 10.9%.
We believe that a high earnings visibility, strong product
portfolio, consistent cash generation, disciplined investment and
limited balance-sheet risk enable IntercontinentalExchange to be
one of the most dynamic companies in the industry. The company is
growing through strategic acquisitions, product novelty and
expansion in the globally emerging markets. The overall long-term
expected earnings growth rate for this stock is 11.2%.
IntercontinentalExchange presently carries a Zacks Rank # 3
(Hold). Other strong performers in the financial sector include
Euronet Worlwide Inc
) , both of which carry a Zacks Rank #1 (Strong Buy).
EURONET WORLDWD (EEFT): Free Stock Analysis
INTERCONTINENTL (ICE): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis
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