NYSE Group (NYX)

DON'T BUY
Has gone up a lot this year. A stock exchange, which is a leveraged play on volumes, mergers and IPOs. If the stock markets do well as they have for the last 4 years, they do very well. When stock exchanges start going public en-masse, we are pretty near the top.
COMMENT
Hasn’t been trading for very long, so he doesn’t have a lot of data. Had a spike in November and would watch this area very closely. It has dropped back and if it goes up again and then down, he would be careful.
HOLD
A lot of consolidation happening in the exchanges globally. Although it has pulled back recently, it is in a very strong uptrend, Good long-term hold.
COMMENT
Undervalued relative to the Mercantile Exchange. The issue is it is in the midst of a merger with Euronext and perhaps with the London exchange, so it is in transition with volatility short term.
TOP PICK
Exchanges have not been well understood nor well covered. There is still considerable upside. Have dramatically reduced costs.
DON'T BUY
A great business with long-term drivers. Will benefit from increased market activity. Has recently had a huge run. Pretty expensive.
HOLD
Pretty good brand name. They have the capital and backing to do lots of good acquisitions. A great business. If you own, you might consider taking some profit. Easy money has been made.
DON'T BUY
Feels the exchanges are overvalued. Doesn’t see the valuations based on earnings growth or cash generation can justify the present prices.
BUY
Still attempting to merge with the European stock market exchanges. Sees a lot of upside potential.
HOLD
Exchanges are marvellous cash cows. Probably all right, but would prefer a lower price.
BUY
In the middle of attempting to merge with Euronex. Will also be starting and options exchange. Will become more electronic with their hybrid system. Cutting costs.
COMMENT
Down 21% since it started. They are volume driven. With more trading, they would do well so it is a leverage play on how you think security markets will do.
DON'T BUY
When it went public, there was a lot of excitement about stock exchanges around the world. A classic case of hype overcoming substance. Could never understand why it was over $60. A recession or slower growth in the US will result in fewer listings and trading will decline.
WEAK BUY
There consolidations in this group. They will probably get involved in something. Given how much it’s fallen, it may be an interesting play.
BUY
Thinks that in 2/3 years it could be a $200 stock. There will be a secondary offering made, and when it is out of the way, assuming the markets are continuing to do well, you will start to see the share price rise again.
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