) reached a new 52-week high of $183.07 on Tuesday, higher than
the 52-week high of $178.87 on the day before. Yesterday, the the
share price of this global derivative exchange operator surged
about 35% on a year-over-year basis, while it rose 46.5% on a
year-to-date basis, thereby gaining strong traction in past
Yesterday's closing price represents a strong one-year return
of about 35.8% and a year-to-date return of about 48.0%. The
S&P 500 index jumped 23.0% and 17.8%, respectively during the
same period. Average volume of shares traded over the last three
months stands at approximately 664.5K.
The improved momentum of this Zacks Rank #3 (Hold) stock is
driven by the company's vigorous efforts to stimulate organic
growth across the globe coupled with strong expense control. This
has also helped IntercontinentalExchange to remain adequately
liquid and simultaneously grow through mergers and
On May 1, IntercontinentalExchange reported its first-quarter
earnings per share of $2.03, which comfortably surpassed the
Zacks Consensus Estimate of $1.98 and the year-ago quarter number
of $2.02. The results also delivered a positive earnings surprise
of about 2.5% in the reported quarter, with an average beat of
3.2% in all of the last 4 quarters.
Though IntercontinentalExchange mirrors the low trading volume
trend of the industry, the company is growing through strategic
acquisitions, product novelty, diversification and expansion in
the globally emerging markets. The proposed
NYSE Euronext Inc.
) merger will further boost efficiencies.
Meanwhile, valuation for IntercontinentalExchange appears
reasonable. The shares are trading at par with the peer group
average on a forward price-to-earnings basis and at 1% premium on
a price-to-book basis.
Both the return on equity of 15.5% and return on investment of
12.5% are in line with the peer group average. Even the estimated
long-term earnings growth is pegged at 11.6%, only marginally
below the peer group average of 11.9%.
Apart from IntercontinentalExchange, other stocks that warrant
a look in the exchange services sector include
CBOE Holdings Inc.
MarketAxess Holdings Inc
). Both these stocks carry a Zacks Rank #2 (Buy).
CBOE HOLDINGS (CBOE): Free Stock Analysis
INTERCONTINENTL (ICE): Free Stock Analysis
MARKETAXESS HLD (MKTX): Free Stock Analysis
NYSE EURONEXT (NYX): Free Stock Analysis
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