To The Moon

As I mentioned in previous articles, the financial sector is still lagging behind the broader market.

Currently, technology has been the outstanding performer of 2023, gaining 42.6% year-to-date. Communication services are second, followed by consumer discretionary, they gained 32.3% and 28.7% respectively. The financial sector has still been lagging, gaining only 8.8% in 2023.

Intercontinental Exchange

Presenting to you, a financial stock which should continue to deliver in the years to come. From its business description online:

Intercontinental Exchange is a vertically integrated operator of financial exchanges and provides ancillary data products. Though the company is probably best known for its ownership of the New York Stock Exchange, which it acquired in 2013, ICE operates a large derivatives exchange, too. The company's largest commodity futures product is the ICE Brent crude futures contract.

In addition to the exchanges business, which is about 55% of net revenue, Intercontinental Exchange has used a series of acquisitions to create its mortgage technology business (18% of net revenue) and fixed-income and data services segment (27% of net revenue).

ICE Year-to-date up 12.64%

Financials

Looking at its income statement, the total revenues have been increasing, and at the same time operating income has also increased steadily.

On the cash flow statement, cash from operations have also been increasing consistently. 

Exchanges make up 66% of its revenues, they operate regulated marketplaces for trading and clearing various derivatives contracts and financial securities. It's trading venues include 13 regulated exchanges and six clearing houses located strategically worldwide. One of them is the New York Stock Exchange.

It's Fixed Income and Data Services segment offers fixed income pricing, reference data, indices, analytics, execution services, global credit default swaps ("CDS") clearing, and multi-asset class data delivery solutions.

Last, Mortgage Technology segment aims to address inefficiencies in the US residential mortgage market. It provides a technology platform that offers advanced digital workflow tools from application through closing and the secondary market.

Since 2006, ICE has grown its adjusted earnings per share by 16% CAGR. Additionally, the company is aggressively acquiring other businesses to expand its services, which will bring return to shareholders in the long run.

Technical Analysis - ICE

ICE daily chart, with EMA 20,40 & SMA 50,100,150,200

Looking at the past year daily chart, it formed a bottom in October last year at a low of $88.60. It has since risen and now is close to its 52-week high of $117.85. For the last few months, the price action has been supported by the 20 exponential moving average, since it tested the 150 daily moving average on June 1st. 

The next expected earnings is on August 3rd, so I would be looking for buy opportunities if the stock gaps down on any disappointing news. The likely supports will be at the EMA 20 or 40, if this is breached then the support will likely come at the daily 50 moving average, around $110.

Lastly, Morningstar gives a fair value of $136 , which represents a 14% discount on the last close.

@CaptainTiger 

@TigerStars 

$Intercontinental Exchange(ICE)$ 

$CME Group Inc(CME)$ 

$S&P 500(.SPX)$