Goldman’s NYX Sell Rating…
If the recent Fool article is correct, giving the reason to the NYX Sell rating by GS, then the reason is not a good one. (I do not care how well they know the company.)
GS also gave a buy to NDAQ thinking the ‘Regulation NMS’ will hurt NYX’s market share. Now, is this something we already did not know? NYX has been losing market share for some time now to the Naz and BATS exchange, why will this make it any different? Market forces drive competition, and NYX is already feeling a loss in market share because the other exchanges are already beating it. I mean the traders are going to the other exchanges for a reason, they are not going to wait for the SEC to tell them to go. (Which, IMO, is easily correctable if NYX decides to do something about it.)
Also, a quick review of valuation speaks for itself…
NDAQ has a PEG of 1.70
NYX has a PEG of 1.55
Keeping in mind NYX is already growing quite nicely in the US market despite the continued leak in market share. But they also merged with an exchange that is increasing its market share in Europe, and growing like gangbusters in all areas of the exchange.
Do not get me wrong, NYX must compete with the other exchanges to stop the rate to which it is losing market share in the US. But the stricked SEC rules are also to blame for the US being weaker in general.
I just do not see the logic in selling a cheaper stock whose company has global prospects, for a more expensive stock whose company has limited prospects.
