NYSE Euronext (NYX)

NYSE Group was formed by the merger of three institutions each with a vibrant history of its own - the union of the New York Stock Exchange, Archipelago and the Pacific Exchange. The company, through these market centers, engages in securities listings; providing market-information products and services; and offering various investment vehicles and order execution services

The recent focus of the group is more on companies listing with less concern of the investing community. This might lead to problems dealing with liquidity, which is provided by the institutional clients who are a large chunk of investing community. Moreover the rise in trading fees and removal of caps for payments from brokers wouldn’t matter much to the revenue model as it would be offset by the new revenue sharing agreement with the specialists.

The company has a big disadvantage of not being able to trade electronically, instantaneously and anonymously. However to combat the same it has rolled out a new hybrid market-combining auction based trading and electronic trading for which the amount and the timing of benefit is uncertain. Moreover it is restricting its trading platform to two segments cash and derivatives from its current five segments.

The merger with Euronext is a “merger of equals”, relies on significant cost cuts in the U.S. portion of the franchise and whose benefits in the near future are not visible. The attitude of the management has been to go for acquisitions with a sole motive of achieving sheer size without having any strategic benefit attached to it. The group has its own set of problems ranging from intense competition primarily from NASDAQ, integration challenges and decrease in trading volumes. Though it looks for bond trading and credit derivatives as potential avenues of growth along with the a cost saving plan the future of the bank for the coming year 2007 looks dull with possible hopes of deriving benefits in 2008.

NYX has garnered a lot of attention over the past 16 months due to lots of publicity (James Cramer infamously listing it as 2007 Growth Stock of the Year, John Thain leaving his CEO post to take over at Merrill Lynch, NYSE's merger with Euronext, and Grasso's lawsuit over the years).

Despite all of the bad press, NYX has fallen to new 52 week lows a few weeks ago and since then has steadily climbed up. Great news came out recently that the NYX management has decided to issue a $1billion stock buy-back after the Q3 AMEX deal concludes. On top of that, dividend was raised by 20%, Wombat Data Systems was bought for $200 million (perhaps to prepare for the SEC's decision to allow exchanges to broadcast real-time stock quotes to monthly users), aquiring CME's Metal Futures at a discount price, LIFFE's derivatives market is booming, NYSE Arca skyrocketing and the list goes on.

The reason for NYX's downfall over the last few months was b/c of its poor epxense control, but analysts feel that NYX is righting the ship and the 2nd half of the year could see NYX soaring up to hte $100 - $120 range, which would be a profit of around 80 to 100 percent. Now, I believe this will occur as we get closer to the conclusion of the AMEX deal in Q3 of 2008.

NYSE recenyly announces 1 billion buyback in common stock.
It also increases dividend 20% to $1.20 per share.
All on top of solid 4th quarter results highlighted by revenues rocketing 79%.
What is not to like with this stock?

NYSE. When markets go bad, the market still makes a fee. There has been a dearth of IPOs in the past few years and when the current recession ends, both NYX and NASDAQ will explode with revenue. In the meantime, NYX has the volume to support revenues and has a steady stream of additional income as ETFs become more and more prevalent on the markets. All that and a dividend yield over 5%.

A bit pricey, but the question is whether or not it will outperform the S&P 500, and that's an easy "yes". This is one of the premier names in financial svcs in the world, and its acquisition of EuroNext will give it a serious lead in the race to provide a longer, more congruent international trading day experience. The integration costs will be high but the profits will be fantastic.

NYX will change the way stock trading is done worldwide. It could be 24 hrs a day. John Thain will consolidate NYX with Euronext, Italian Bourse, Tokyo Stock Exchange. He wanted the London Stock Exchange, but the Nasdaq bought 25% of the LSE's shares. I think this strategy by the Nasdaq might backfire, leaving the LSE open to the merger with NYX. Many other exchanges will feel dwarfed by the consolidation of these exchanges. It could be like the merger mania of the 90's only global.

Many have this right but timed it wrong. Good support in the 50-60 range, growing revenue & income. As Warren Buffett woud say, "Wait for the fat pitch." Well fellow fools, swing away!

Ooh yah, they are buying back their stock and raised the dividend. What is there not to love here?

This is a company in the early innings of a major tranformation and expansion strategy. A true blue chip with tremendous opportunity to become an international institution. It will be a classic example of what happens when a non-profit is let loose. The key bet here is on John Thain, ex-Goldman CEO candidate. He is playing a multi-level game of chess across the globe. In addition to his obvious intellect, he is a consumate politician, a crucial trait if he is to negotiate global partnerships. There is no reason why this should not become a mutli-bagger over the next few years.

Learned the hard way Cramer likes the pump and dump game. NYX is proof to this theory. He pushed this stock hard in his Action Alerts portfolio to which I spent way too much cash to subscribe.

I should have followed the fundamentals, not the hype. I find it highly unlikely this 91 PE stock is worth more than $40. To pay any more than that says your a gambler, not an investor... I predict by October this stock will be less than 50

The New York Stock Exchange Group is truly preparing for the onslaught of electronic trading that is taking place. They are committed to becoming the largest securities trading exchange in the world. I think they will succeed.

The NYSE is just beginning to see the benefits of its cost cutting measures as it cuts unnecessary labor and implements new trading technologies. Over the next few years it should become an even leaner, meaner cash genrating machine(er).

If the CAPS world sees a newbie's picks, what do they see? Do they remember the time they each might have spent making their own choices? Do they remember agonizing about that choice?
Caps is FUN; putting your own hard-earned money where your mouth says, that is REAL. I choose NYX because NYX is THE GAME. If you want to be in the game then where are you going to play? Who owns the game. Think hard....I did.

I'll be the lone voice, crying in the wilderness.

The banker always wins in Monopoly

headed to $100

Merger integration+rising margins. They are bidding for Euronext exchange which could be huge for global partnerships. Not a cheap stock but abnormally expensive due to depressed margins that will go up to normalized level of +20%net. John Thain CEO is a very smart, connected guy. With more transcations from etf's, new products, the exchanges will benefit since they don't need to add any extra staff, just servers.

ever hear that one about the guys who got rich during the gold rush -- they sold the shovels. same with nyx

Will become the first global exchange with the soon-to-be completed merger with Euronext. Integration and cost savings plan will lead to tremendous increases in net income. More mergers/aquisitions to follow. Next stop: Asia.

People need a place to make trades. And nothing is more prestigous than the New York Stock Exchange.

With the new automation and future acquistions, I can't see this stock going anywhere but up.