ICE is Looking Tasty
ICE is looking pretty good here. The stock has been beaten down, and all exchanges have experienced multiple contraction, despite their continued growth prospects, thanks to the market sell off. Ironically the very market sell off is benefiting the exchanges, yet they still go down.
ICE reported very good numbers today beating the Streets expectations by 0.02, but w/compesation expenses was below 0.02. (I guess the Streets expectations takes into account compesation expenses when estimating as the stock fell today.)
ICE reported record breaking volumes in Jan. This simply indicating the next quarter go around should be pretty good, especially with the multiple contraction it has already seen.
Oh… and lets not forget NMX was recently offered $11B by CME. This is also a reasonable buyout price for ICE as well, given their better operational performance, countering their somewhat lower revenue when compared to NMX. An $11B buyout of ICE suggests ICE should be eventually bought out for no less than 158. A 20% premium from the current price of 131.
Now looks like a good time to enter, as it is sitting on a support it is retesting. The support should hold due to the above fundamental reasoning given above, but the chart is pretty negative at the moment. So that merits an initial entry, and entering in stages if it goes lower.
I would play the common here (and I will after the publish the post), as the market is tough to understand for the time being, and the timing of a buyout is questionable. Could be next month or over a year from now.
