Intercontinental Exchange, Inc. (NYSE:ICE)

CAPS Rating: 5 out of 5

The Company operates the electronic global futures and over-the-counter, marketplace for trading an array of energy products as well as the leading global soft commodities exchange.

Recs

3
Player Avatar AlphaCenturion (31.74) Submitted: 8/18/2010 12:10:38 AM : Outperform Start Price: $99.11 ICE Score: +29.89

Where to begin. Judging from the numbers alone I would say ICE is at the very least fairly valued if not significantly undervalued. While it trades at a premium relative to competitor CME, given their growth and financial performance I think the price is more than warranted. What I like most about ICE is the fact that they run a highly efficient, vertically-integrated operation while aggressively moving to expand and diversify as well. They just acquired Climate Exchange (CLE) for roughly $600 million, adding emission credits to their existing swap and futures business and giving them exposure to potential future cap and trade regulations. While it's difficult to predict exactly how the new financial reform rules will affect ICE's revenue which is largely volume-driven, I think it's safe to say that the company stands to benefit from the inevitable shift towards centralized, regulated exchanges. Macro, there aren't really any huge fundamental risks and any time you can pick up shares under $100 is probably a good opportunity.

Member Avatar AlphaCenturion (31.74) Submitted: 9/14/2010 1:32:20 AM
Recs: 0

Bought for my real portfolio today at $106.95. Kicking myself for not getting in at $95 but this will be a medium to long-term hold regardless.

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