Investment Technology Group (NYSE:ITG)

CAPS Rating: 3 out of 5

The Company is a specialized agency brokerage and technology firm that partners with clients globally to provide innovative solutions spanning the entire investment process.

Results 1 - 17 of 17

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Member Avatar nevercontent (87.68) Submitted: 5/21/2015 2:31:54 PM : Underperform Start Price: $27.95 ITG Score: +35.33

The company seems to be gaining a lot of traction with its dark pool offerings (the POSIT family), especially internationally, which should lead to network effects and a competitive advantage: as more funds join the pool, liquidity increases, making the pool more attractive for others.

However, the company’s brokerage and market-making activities also expose it to tremendous risk, as it must make good on its clients’ obligations in the event they default. Interactive Brokers — one of the best in the business, IMHO — was left holding a $120 million bill in January when the Swiss National Bank suddenly devalued the Swiss Franc, pushing some of IB’s clients into default. FXCM, considered one of IB’s biggest competitors for Foreign Exchange trading, was left holding a $225 million bill, which nearly wiped it out entrirely (it was bailed out by Leucadia after its shares plunged 85% in value).

So regardless of what one thinks of the business performance, there is always this risk of catastrophe that, more or less, is beyond the control of management.

Glassdoor reviews are also very unfavorable: only 36% of employees approved of CEO Bob Gasser. Employees describe management as erratic, shifting directions all the time and offering no clear sense of direction. There seems to be a sense that there are way too many middle managers, creating a lot of politics and bureaucracy, and making promotion difficult. Tech employees seem to feel unchallenged and micro-managed, which is a very bad thing for a tech company. Contrast this with Interactive Brokers, which has a very tech-centered culture: when CEO Thomas Peterffy was asked how they incentivize their programmers, he said “Well, we hope to give them challenging jobs, which means that we keep them interested by allowing them to come up with their own suggestions and to create systems that are better than on par with elsewhere.” That's the right answer.

ITG stock may do well in the short term as margin expansion provides tailwinds for EPS, and the company’s geographic expansion seems to gain traction. But in the long run, I don’t think the right culture is in place, revenue is not growing quickly enough to maintain the current pace of EPS growth, and the risk of unpredictable and potentially catastrophic losses will always be a cloud over the business.

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Member Avatar zultanite (< 20) Submitted: 2/27/2010 5:22:36 PM : Outperform Start Price: $16.94 ITG Score: -83.54

Very good chart.

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Member Avatar kevinottofro (97.22) Submitted: 2/6/2010 7:42:43 AM : Outperform Start Price: $17.72 ITG Score: -95.26

low relative PE, good star & 2010 earnings. Bottom fishing week of 2/8

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Member Avatar jerseytix (71.29) Submitted: 12/18/2009 12:10:15 AM : Outperform Start Price: $18.93 ITG Score: -95.21

great business model, great numbers

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Member Avatar pong2015 (51.52) Submitted: 4/17/2009 1:48:12 AM : Outperform Start Price: $21.69 ITG Score: -157.16

Asterism Output:
12.2/14
13.2/18.6

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Member Avatar ToddMCTC (31.50) Submitted: 8/13/2008 8:32:00 AM : Outperform Start Price: $31.19 ITG Score: -107.91

10.68x times forward earnings. That's before you back out eight dollars in net cash. Back out the cash and you come up with a forward PE of 7.97. Not bad for a company that takes no risk. The company offers an execution platform, order and portfolio optimization and other services for mutual funds and hedge funds. Formerly a unti of Jefferies this company grew revenues at 15% last year and 50% the year before, oh and that is just US Operations. International revenues grew at 61% last year and 19% the year before and remain 15% of total sales.

Consider that once the platform has been developed all incremental sales above fixed costs fall to the bottom line. In the depth of the markets in 2003 and 2004 ROE dropped to a low 11.7% while sales declined by 13.8%. Since this time ROE has stabilized at around 16%. Book Value currently stands at $17.55 per share. A 12% ROE disaster at the firm would put them earning $2.10, not the $2.96 forecast. Ex out eight dollars in cash and you currently have a stock trading at 11x FPE. Not too bad for a worst case scenario.

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Member Avatar TMFJake (34.58) Submitted: 8/8/2008 10:53:18 AM : Outperform Start Price: $29.64 ITG Score: -105.20

Profits falling, analysts are are lowering their estimates and ratings, sounds like the perfect time to swoop in a pick up a quality company that is producing excellent products for institutional investors.

The catalyst, I think, will be increasing margins in their international markets business. This may take some time to play out, but given the beating the ITG's share price has taken in 2008, I think now is a good time to buy in...

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Member Avatar fredmahnke (< 20) Submitted: 5/5/2008 10:40:59 AM : Outperform Start Price: $44.41 ITG Score: -110.10

Strong Earnings report did not stop analysts from downgrading this stock. Strong track record of growth and beating estimates. International growth strategy will pay dividends. Additionally, this could be a takeover candidate when large investment banks reload capital - TGT - 51.50 in 07/08

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Member Avatar hardwareace (74.88) Submitted: 2/1/2007 11:34:24 PM : Outperform Start Price: $46.80 ITG Score: -111.50

Undervalued. Likely takeover candidate within two year timeframe.

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Member Avatar RyansPicks (76.52) Submitted: 12/28/2006 9:09:38 AM : Outperform Start Price: $43.15 ITG Score: -110.96

Strong underlying growth in global electronic trading combined with a robust us equities market will continue to benefit this company. The risk is a major disruption to the equities market and/or the companies inability to update its technology.

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Member Avatar dbrown12009 (< 20) Submitted: 12/8/2006 7:35:32 AM : Outperform Start Price: $42.73 ITG Score: -111.96

This stock has strong fundementals and the general consensus is that it is undervalued in the low 40s.

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Member Avatar snoopyj (< 20) Submitted: 11/17/2006 4:01:41 PM : Outperform Start Price: $39.22 ITG Score: -109.80

Mutual fund companies now have seperate payments for trading and for researching. This gives them the option to choose the trading firm that provides the best execution, value, and trading resources. Invesment Technology Group will be that company. Additionally, the company provides services to help measure and to minimize trading costs, which improves the rate of return for its clients. Recently, the company acquired Macgregor, an order management company as well as Plexus Group's post-trade performance measurement software. These two moves will help ITG access new customers while improving the quality of its current offerings.

Revenues jumped in 2005 because of acquisitions. Sales are expected to grow in-ine with the growth of the equity market volume at roughly 15% per annum. Operating margins have remained above 20%.

Target Price: $71.00
52 Wk High: $59.07 (-33.1%)
52 Wk Low: $34.43 (14.6%)

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Member Avatar kabudaijin (67.41) Submitted: 11/6/2006 3:18:00 PM : Outperform Start Price: $40.84 ITG Score: -112.87

-compelling business -high barriers to entry -few competitors -strong financials -strong earnings -oversold due to myopia -buyout candidate or to be influenced by buyouts, p/e must rise as result

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Member Avatar jersey1010 (< 20) Submitted: 10/9/2006 1:20:26 PM : Outperform Start Price: $49.75 ITG Score: -124.08

It serves institutional investors, brokers and alternative investment funds, and money managers in the United States, Australia, Europe, Canada, Japan, and Hong Kong. The company was founded in 1983 and is headquartered in New York City. Investment Technology Group, Inc. acquired The Macgregor Group, Inc. in January 2006.

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Member Avatar ddoeditor (90.28) Submitted: 10/3/2006 5:04:31 AM : Outperform Start Price: $43.73 ITG Score: -122.10

last great independent trading tech firm

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Member Avatar jfjf88 (94.67) Submitted: 8/29/2006 1:57:55 AM : Outperform Start Price: $45.23 ITG Score: -126.94

Investment Technology Group specializes in trading software (especially trade execution performance tracking). It also maintains a quasi-exchange, POSIT, where traders can cross large blocks of shares anonymously.Operating margins are typically in the high 20s. Excellent software and POSIT make ITG an excellent acquisition candidate in the technology-driven consolidation of exchanges.

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Member Avatar scippio (77.15) Submitted: 8/22/2006 5:17:21 PM : Outperform Start Price: $47.58 ITG Score: -128.89

Industry leader that grows market share almost every quarter

Results 1 - 17 of 17

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