NYSE Group (NYX)

SELL
Q: Should caller sell this and by Visa (V-N). A: NYSE Group is not really performing very well. Thinks this would be a reasonable trade but there could be a pullback on Visa in the short term.
DON'T BUY
(Market Call Minute.) He has a model price of $55.16, a -2% differential.
SELL
Exchanges are having an interesting situation. A couple have done very well because they have particular monopolies in their contracts. This one doesn't, so they have been losing shares. Doesn't like the long-term outlook for this.
WATCH
Problem is that it has a downtrend line and very little base building in September. He would love to see a selloff to about $69 to give it a double bottom. Wait for it to approach the $68-$69 level.
TRADE
Thinks the New York stock exchange is one of the cheapest exchanges in the world.
DON'T BUY
Looks like it has hit bottom here but there is not a lot of volume, which is not a good sign. Decline has been pretty persistent for most of the year. If the trend continues, you could see $60.
BUY
Over the next couple of years, he sees the US portion of the business adding a derivatives component to it. Can see the floor closing in a few years and then their current profit margins of 24% could move up sharply.
WATCH
Looks like an ordinary pull back within an uptrend. Having a short term downtrend. Don't buy today, if it drops a bit more, then sell. Wait for the pull back to go a bit higher before buying.
SELL
Not comfortable with the valuations with the stock exchanges.
BUY
His firm has a big vested interest in the NYSE. Has pulled back in the last little while. He feels that it will eventually trade at over $200.
DON'T BUY
Not performing strongly as they are viewed as an acquirer rather than an acquiree. Own the exchanges that are being bought, not the buyers.
COMMENT
Had a lot of support around and $90-$95 area with a lot of resistance around $110. In a consolidation range. Fundamentally it's a little rich on the P/E, but will be closing their deal with Euronex pretty soon giving a lot of revenue possibilities. From a Put selling perspective, you can capture about 3.5%-4% in 30 days by selling Puts around $90.
DON'T BUY
Merging with Euronext, the European exchange. Also purchasing 5% on India's National Stock Exchange. The price of all these exchanges are terribly overpriced. Growth potential is not there.
DON'T BUY
Stock exchanges are fantastic assets as they have reoccurring revenues from the regulatory part of their business. Businesses of huge operating leverage as fixed costs are so low that for every $1 of revenue that comes in, go straight into the pre-tax profit line. Valuation is a bit steep at this time.
BUY
There will continue to be consolidation with exchanges. This one is a global leader and are likely to make acquisitions as we go along. There have been lots of money made in these, but if we continue to have strong equity markets, this is a good one to own.
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