Riding on a steady growth momentum,
Nasdaq OMX Group Inc.
) reached a new 52-week high at $32.92 on Jun 10, after hitting a
52-week high of $32.88 on Friday. Shares of this global stock
exchange operator climbed approximately 16.7% since the company
reported its first-quarter 2013 results, with a positive earnings
surprise of 4.92%.
The improved momentum of this Zacks Rank #3 (Hold) stock is
driven by the company's vigorous efforts to perk up organic
growth coupled with strict expense control. Nasdaq delivered
positive earnings surprise in all of the last 4 quarters with an
average beat of about 4.96%.
Yesterday's closing price represents a strong one-year return
of about 48.8% and a year-to-date return of about 31.7%. The
Nasdaq index jumped 21.5% and 15.0%, respectively during the same
period. Average volume of shares traded over the last three
months stands at approximately 1628.3K.
On Apr 24, Nasdaq reported its first-quarter earnings per
share of 64 cents, which comfortably surpassed the Zacks
Consensus Estimate and the year-ago quarter's earnings of 61
Results reflected slight improvement in average daily volumes
along with improved information, technology and market data
revenues. The upsides were partially offset by continued weakness
in revenues from market services and listings. Meanwhile,
operating expenses surged due to high operating costs and expense
related to voluntary accommodation program.
While Nasdaq is focusing on gaining scale through strategic
acquisitions and alliances coupled with intense organic growth,
the rising debt on account of such expansions are raising the
concerns of the ratings agencies. Nevertheless, these factors
should create additional sales opportunities in the long run,
thereby sustaining investor confidence on the stock.
Further, valuation for Nasdaq appears to be somewhat
stretched. The shares are trading at a 40% discount to the peer
group average on a forward price-to-earnings basis and 67%
discount on a price-to-book basis. While return on equity of 8.4%
is quite below the peer group average, return on assets of 4.8%
stands fairly above the same comparable metric. Even the
estimated long-term earnings growth is pegged at 9.4%, lower than
the peer group average of 11.9%.
Apart from Nasdaq, other stocks that warrant a look in the
financial sector include
XL Group Plc
Regional Management Corp.
Investment Technology Group Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
INVEST TECH-NEW (ITG): Free Stock Analysis
NASDAQ OMX GRP (NDAQ): Free Stock Analysis
REGIONAL MANAGE (RM): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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