IntercontinentalExchange, Inc. (ICE)

ICE is down today. (3/07/07) But it had been tearing up the charts. Is this a breather and profit taking after a runup or is the bottom falling out of this thing. I bet profit taking. From what I read the platform is great. Trade or longer term - I think either is a reasonable bet.

ice - strong formidable player
in the commodities futures space - very electronic ,cost saving, efficent money making organization , with very limited
competition .. backed by pwerful
investment banks -price target
over 200...

I made a bunch of points on the way up and now it is time to collect on the way down.

Should continue drop with market downturn. Unless I am wrong but my crystal ball never lies, except when it does.

World money machine when it come to energy trade and we all leave the lights on and the car running in the drive way. Plus I even like to drive big fat suv with 8 cylinders and pass and speed whenever possible. That reminds me I have to call my attorney on that last ticket, I think I need to call Buffet's Gieco for a quote on high risk stock picking insurance

It is an agressive company that is consolidating electronic trading in new areas. Profits look good, it is up nearly 300% in the past 12 months and will hopefully go another 50% in the coming year.

Most def! It will outperform. Yes, volatility is excrutiating & yes a blind monkey throwing a dart towards a board carried by a red ant could hit outperform based on the cesspool created this month! . For about 3 yrs. I waited anxiuosly to buy this stock. resisted the temptation when it hit the 90s! Then came Oct 2008! I watched this carefully. Here's what happened:

Twice it hit $61/-, then finally in today's paranoia, it dipped to $53/-. I was still analyzing this stock thru the day using Valueline #s. (will explain L8r). Couldn't buy @ 53 or 55, waited to see the last 30 min volatility that we're used to. Then plunked some actual $$$ in & bought it @ $59/+. Peak to trough was $62-$53.

This is actually the price that ICE started trading for the general public with it's IPO on day 1 @ the open. I did regret the decision not to buy @ that price! But after a few gut wrenching hours I bought it below $60/- today.

The first time it hit $61/- was on Fri Oct 10th. The next monday it opened @ $115/-. Imagine the volatility. Settled in the high 80s to 90s. In the subsequent selloffs, it came back to $61/- again & ballooned back up to the mid $70s! That day it's trough to peak was $61/- to $79. Wow. That'd completely thrown me off, until I looked @ Valuline #s on their report for Oct 24th.

They reduced their estimates for 2008 by 6% & 2009 by 3/+%.

2008 EPS= $4.85. (ICE Eurpoe clearing house is delayed till November). Now I said what if that was more hokie than fact that they were writing ( remember the S&P execs. & their cow analysis in front of congress)! Reduce it by 20%, I said! That'd give 2008 earnings $3.88.

Nouriel Roubini stated yesterday to expect 2009 S&P to earn $60/- giving it a 12 multiple. So, I thought multiply the reduced earnings by 12 & u get $47/- $48/-. The 2006 avg P/E was 28 & 2007 was 43.

Suppose all that was irrational exuberance! So far 2008 has ranged from 10.9 ( todays low & using Valuline full eps of $4.85) to 40 @ it's peak prior to the crash! Now that average would be skewed. So I wondered if a multiple of 15 would be justified. Since it did get down to 10 earlier, & we know that the business is in tact & as the leading ELECTRONIC exchange for futures, OTC, commodity & yes, CDS ( don't forget those jewels, which they'll be for ICE), that couldn't be a stretch. So @ $3.88*15= $58 & if valueline's #s come in close we're looking @ $73/-. Even if we average, this is still a $65/+ stock. That's for 2008.

2009 Valueline EPS is @ $6.20, reduced from $6.45. Reduce it by 20% ( for all of Wall Street's shenanigans) & I came up with $4.96. Multiply that by 12 & we get the price I paid today of $59. Multiply it by 15 & I get $75/-. If Valuelines #s come in within$6/-, we're looking @ 6*12=72 or 6*15=$90/-.

Now, the 20% reduction is based on mistrust of analysts #s! There once was a risk premium in the bond/ debt market; and since the analysts created cow dung out of them we have to create a mistrust premium. Yes, it's a guess, but even when I reduced it by that much I still came out with a valuation in the mid $70s. possibly 25 % return. Obviously, that's just fantasy! Next week it could drop down to $40/-. If so, I'll buy what little I can.

Now, Cash Flow. 2007 operating cash flow was $288 million! 2008 projected to be $420 mill ( $6.10/ per sh.). 2009 operating cash flow of $500 mill/+($7.20/ persh). So, I put my mistrust premium to work on those #s. 2008 reduced by 20%, gave me $4.88. So, I paid 12* cash flow for this year. & after a mstrst reduction for 2009, I came up with 5.76. Gave 10* 09 cash flow. If I used Valueline #s, paid 9.7* 2008 & 8.2* 2009 cash flow. Don't know if that's good or bad!

With Book value, paid 2.8* 2007/ 2.8* 2008(based on mstrt premium, otherwise, it's 2.2*2008)/ 2.4* 2009( with mstrst premium, or 1.9* valueline).

A few things about ICE. Congress wanted to blame them for Oil price speculation, so in the bright future of further Gov't regulation, expect some form of limits put on OTC/ derivatives trading. Don't know what it'll be! ICE was the reason Open Outcry was eliminated & prices were matched to real time electronically! they also made NYMEX cry! Initially, using Philip Fisher's theory of goodwill creating value, I thought NYMEX would be better than ICE. Thankfully, I never bought that stock, since it was evident what ICE was doing to the open outcry system! Finally, rumors are a whirlin' that they maybe bought by a foreign entity! Bad news here is that if prices go down the premium offered maybe below where I got in. Good news is that @ least through the next couple of years the volatility will allow the company & CEO to just say NO!

Finally, why valueline? Walter Scloss had a 22,000% gain thru his investing carrer using Valueline survey in a corner room with a writing instrument of some sort & some papyrus! Sad, isn't it. the more technology we use the worse our investing record is!

May your returns be stratospheric, hopefully not from the ocean floor up!!

The consolidation in this sector is incredible. Any of these companies can buy another or be bought. All the worlds markets are going to be linked one day. This is a start of putting the good products together. ICE is doing well fundamentally. This a BUY.

Carbon credits....when they come to US it will be big, ICE has a small advantage, because they are dealing with the ECX in Europe so they are getting an idea of how it works. Obstacles are our government and system, and how it actually on folds in the US, and when. It could be years, but when it does, big business will be generated. Broker upside as well.

Current price is backtesting upper boundry of linear regression channel. It will kiss the channel and move higher. CME wins CBOT and it lights the candle for ICE. Back to 170 area by July

I have already made good money on some calls for this stock. There are take over rumors and this could run to $165 very soon.

There be m&a in this sector

growth over the next few years

ICE is not only seeing very strong growth in transations, it will be converting NYBOT to its electronic exchange which will increase both its revenue and profit growth. Pick this one up now before it's too late.

great fundamentals

Superior electronic platform translates to a superior product to the customers. Although the "market" is always efficient, the "marketplaces" of execution in the us are still full of inefficiencies. Look for ICE to come out on top of the "low cost of end-to-end trade execution" battle

Because I think that these types of stocks are hot. ICE has done very well over the last year or so through positioning.

Heard this one on CNBC. Looks like its doing nicely.

solid growth opportunity

good stock

ICE will continue to capture NYMEX market share due to increased efficiency. They are the best positioned competitor to ride an e-trading trend in financial markets. NYMEX will continue to be hampered by "DMV" effect of being member owned.