$ICE (-0.32%)
The Intercontinental Exchangefor short ICE! A company behind some of the largest stock exchanges in the world - including the NYSE! But how strong is ICE really? Is an investment worthwhile? And what risks are lurking? I'll find out now

📌 Company profile

• Founded: 2000 in Atlanta, USA.
• Most important acquisition: Purchase of the New York Stock Exchange (NYSE) in 2013!
• Market capitalization: Around 101.10 billion US dollars - a real heavyweight!
• Performance: Over the last 10 years +300% return (≈ 15.2% per year)!

💰 Key financial figures - the hard facts!

📈 Turnover per share:

• Strong growth: Almost tripled in 10 years (≈ 11.6% per year).
• There was a dip in 2022but things have been on the up again since then - thanks to data services, ESG products and high trading volumes on the NYSE!

📉 Return on invested capital (ROIC):

• Low! Highest value in 2017: 11.14% - Not exactly stunning.
• Why? High investments (clearing houses, acquisitions) depress the yield.

💵 Dividend:

• Has only been paid for 10 years paid, but growing strongly (over 10% per year).
• Payout ratio still low → Potential for further increases!

⚠️ Risks - Where are the dangers lurking?

1️⃣ Regulatory hurdles:

• ICE operates in a strictly regulated environment (CFTC, FINRA, Basel III).
• New rules could increase costs - especially in the clearing business!

2️⃣ Mortgage technology (22% of sales):

• High interest rates slow down the real estate market. [1]
• Loan defaults are rising (3.47% in January 2025).
• Natural disasters (e.g. forest fires in California) are an additional burden.

📊 Q1 2025 - The results!

• Earnings per share (EPS): 1.72 $ (adjusted) - 2 cents above expectations!
• Turnover: 2.47 billion dollars
• Strongest segment:
  Exchange segment (+12% sales, 76% margin!)
• Weakness:
  Mortgage segment (0% growth, negative margin)

🔮 Outlook: Q2 2025 - What's next?

• Result expected on July 31, 2025.
• Forecast:
  1.74 EPS,2.5bn.EPS,2,5bn. Turnover - will exceed ICE again

Valuation based on reversed DCF method:

Thus, with the reversed DCF method involves working backwards from the current market price of a share. And the idea behind it is to calculate the growth rates and cash flows that the market implicitly expects for the current price.

This means that in order to justify the current share price, the free cash (FCF) would have to increase by 7,159% over the next 10 years.

And the company has outperformed this 7,159% over the last 5 and 10 years, so it seems to me to be somewhat relatively undervalued.

not investment advice !!!

Conclusion:

ICE is a strong but complex investment - with growth potential, but also risks! Anyone looking for stable dividends and long-term trends could find what they are looking for here. But beware: the regulatory and macroeconomic challenges should not be underestimated!

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[1] https://fxnewsgroup.com/forex-news/exchanges/ice-registers-steep-increase-in-revenues-in-q1-2025/

Yesterday and today I once again discovered 2 interesting stocks outside the mainstream. One is $ICE (-0.32%) and the other $HALO (-1.14%) . Of course I bought both with derivatives, as you would expect from me. But I also think that the shares are interesting. Does anyone else have them in their portfolio or on their watchlist?

ICE Q3 2024 $ICE (-0.32%)

Financial performance

• Consolidated net salesConsolidated net revenues for the third quarter of 2024 amounted to USD 2.3 billion, a significant increase compared to the previous year. This includes revenues from Exchanges of USD 1.3 billion, Fixed Income and Data Services of USD 586 million and Mortgage Technology of USD 509 million.
• Operating profitConsolidated operating profit amounted to USD 1.1 billion, with an operating margin of 47 %. Adjusted operating income was USD 1.4 billion and the adjusted operating margin was 59%.
• Total revenuesTotal revenues for the first nine months of 2024 amounted to USD 8.7 billion, an increase from USD 7.2 billion in the prior-year period. Net income for the first nine months was USD 2.1 billion, compared to USD 2.0 billion in the previous year.

Balance sheet overview

• Assets and liabilitiesTotal assets amounted to USD 135.2 billion as at September 30, 2024, down slightly compared to USD 136.1 billion at the end of 2023. Liabilities amounted to USD 107.9 billion, also down slightly compared to USD 110.3 billion at the end of 2023.

Cash flow overview

• Operating cash flowOperating cash flow amounted to USD 3.1 billion.
• Adjusted free cash flowAdjusted free cash flow amounted to USD 2.6 billion.

Key figures and profitability metrics

• Adjusted operating marginAdjusted operating margin for the third quarter was 59 %.
• Diluted EPSAdjusted diluted earnings per share (EPS) for the first nine months were USD 4.55, compared to USD 4.30 in 2023.

Segment information

• Exchanges segmentOperating income for the third quarter was USD 947 million, with an operating margin of 76%.
• Fixed Income and Data Services: Revenues were USD 586 million, with an adjusted operating margin of 45%.
• Mortgage TechnologySales in this area amounted to USD 509 million, with an adjusted operating margin of 35 %.

Competitive position

ICE delivered a strong performance across all segments, with significant growth in revenues and operating margins, reflecting a robust competitive position in the market.

Forecasts and management comments

• Fourth quarter outlookGAAP operating expenses are expected to be between $1.23 billion and $1.24 billion, while adjusted operating expenses are expected to be between $977 million and $987 million.
• Capital expendituresCapital expenditures for the full year 2024 are expected to be between USD 700 million and USD 740 million.

Risks and opportunities

ICE faces risks from regulatory changes and market volatility, but there are opportunities from the expansion of the data services and mortgage technology segments.

Summary of the results

Intercontinental Exchange, Inc. delivered strong financial performance in the third quarter of 2024 with significant revenue and operating income increases across all segments. The company has a solid balance sheet and generates strong cash flow. Management's future focus on cost management and strategic investments indicates good positioning for further growth.

Positive aspects

• Record revenuesICE achieved record net sales of USD 2.3 billion in the third quarter of 2024, an increase of 17% compared to the previous year. This indicates strong growth in all business segments.
• Strong operating resultOperating profit reached a record level of USD 1.1 billion, an increase of 31 % compared to the previous year. Adjusted operating profit amounted to USD 1.4 billion, an increase of 17 % compared to the previous year.
• High operating marginsAdjusted operating margin was 59% in the third quarter, reflecting efficient cost management and strong profitability.
• Growth in mortgage technology: This segment reported sales of USD 509 million, an increase of 54% year-on-year, with an adjusted operating margin of 35%.
• Improved cash flowAdjusted free cash flow for the nine months ended September 30, 2024 was USD 2.6 billion, demonstrating strong cash flow generation.

Negative aspects

• Decrease in total assetsTotal assets decreased slightly to USD 135.2 billion as of September 30, 2024, compared to USD 136.1 billion at year-end 2023, indicating a reduction in the asset base.
• Loss in the mortgage technology segmentDespite revenue growth, the Mortgage Technology segment reported an operating loss of USD 54 million in the third quarter, with a negative operating margin of (11%).
• High operating expensesConsolidated operating expenses for the third quarter amounted to USD 1.2 billion, which, although well managed, still represents a significant cost burden.
• Increased short-term debtCurrent liabilities increased to USD 2.6 billion as of September 30, 2024, compared to USD 2.0 billion at year-end 2023, indicating higher short-term debt.
• Regulatory and litigation costsThe company incurred costs related to litigation and regulatory matters that impacted adjustments to net income, although no specific amounts were disclosed.

🌐 Stock exchange battle: Deutsche Börse, ICE, Euronext, NASDAQ - who dominates trading? 📊

Company presentation

Deutsche Börse AG

Deutsche Börse is one of the world's leading exchange operators and offers a wide range of services in the areas of trading, clearing and market infrastructure. In addition to the Frankfurt Stock Exchange, the company has particularly distinguished itself through its innovative strength in the field of electronic trading.

Euronext NV

Euronext is a pan-European exchange group that operates markets in Belgium, France, Ireland, Italy, the Netherlands, Norway and Portugal. It is the largest stock exchange in Europe and offers a platform for trading shares, bonds and derivatives.

Nasdaq

As the world's first electronic stock exchange, founded in 1971, Nasdaq has developed into the leading trading center for technology companies. It is known for its high liquidity and the immense trading volume that is handled daily.

Intercontinental Exchange (ICE)

ICE operates global financial and commodity markets and is best known for its acquisition of the New York Stock Exchange (NYSE). The company offers a wide range of services, including trading in energy, commodities and financial derivatives.

Historical development

• German Stock Exchange: Its origins date back to the 16th century. The modern Deutsche Börse was created in the 1990s through mergers of regional exchanges and has since undergone extensive digitization.
• Euronext: Founded in 2000 through the merger of several European exchanges, Euronext has become the leading European platform through acquisitions, such as Borsa Italiana 2021.
• Nasdaq: Since its inception, Nasdaq has revolutionized electronic trading. The launch of the Nasdaq 100 index in 1985 strengthened its position as the central trading platform for tech companies.
• ICE: ICE was founded in 2000 and has rapidly expanded its position as a global player through strategic acquisitions, including NYSE in 2013.

Business model

• Deutsche Börse: It offers a comprehensive range of securities and derivatives trading as well as clearing and settlement services via Clearstream. Its diversification strengthens its competitiveness.
• Euronext: As an integrated platform, Euronext covers trading in equities, bonds and derivatives and offers additional services in the areas of corporate services and technology.
• Nasdaq: Nasdaq focuses on electronic trading, particularly in the technology sector, and offers innovative products such as ETFs and indices.
• ICE: ICE combines trading in commodities and financial derivatives and also offers clearing services, which increases the efficiency and transparency of its platforms.

Core competencies

• Deutsche Börse: Excellent technical infrastructure and market knowledge.
• Euronext: Leader in European market infrastructure with a diversified service offering.
• Nasdaq: Innovative power in electronic trading and a strong presence in the technology sector.
• ICE: Expertise in commodities and derivatives trading as well as strong clearing capabilities.

Future prospects

• Deutsche Börse: Focus on digital transformation and entry into new markets.
• Euronext: Investing in sustainable financing and consolidating its market position in Europe.
• Nasdaq: Expansion of AI and blockchain-based technologies for trading optimization.
• ICE: Expanding its product portfolio with innovative trading solutions and technologies.

Strategic initiatives

• Deutsche Börse: Securing its market position through acquisitions and investments in new technologies.
• Euronext: Focuses on expansion through acquisitions of regional markets to create an integrated European trading platform.
• Nasdaq: Focuses on launching new products, especially to support growing technology companies.
• ICE: Strong integration of new technologies to optimize trading processes and expand its business model.

Market position and competition

German Stock Exchange

Strong in Europe

Euronext

Euronext

Leading in Europe

German Stock Exchange

Nasdaq

Leading in the USA

NYSE

ICE

Strong global position

CME Group

Total Addressable Market (TAM)

• German stock exchange: Coverage of the European market with a focus on equities and derivatives trading.
• Euronext: Coverage of the European market with a focus on equities and bonds.
• Nasdaq: Global technology market with a particular focus on the USA.
• ICE: Covers global commodities and financial derivatives markets.

• Equity performance
• $DB1 (+0.23%)
  : TR over 10 years is 366%
• $ENX (-0.07%)
  : TR is 620% over 10 years
• $NDAQ (-0.05%)
  : TR is 503% for 10 years
• $ICE (-0.32%)
  : TR is on 10 years is 343,1%

For the development (company figures), better view and more check out the free blog:https://topicswithhead.beehiiv.com/p/b-rsen-battle-deutsche-b-rse-ice-euronext-nasdaq-wer-dominiert-den-handel

Conclusion

Stock market shares are always interesting because they benefit disproportionately from good stock market years due to their relatively fixed costs. In addition, these companies are increasingly developing into data managers, which promises further growth and efficiency gains. There is still plenty of potential for consolidation and growth in the European stock exchanges in particular, especially due to the dynamic market activities.

When looking at capital efficiency, Euronext and Deutsche Börse stand out, either as top performers or as only slightly worse alternatives. Therefore, they are my preferred candidates if I had to make a decision. Despite everything, all the stocks mentioned have performed impressively, which is why I hold all but ICE and regularly buy more.

If you are active on the stock market and want to participate, you can hardly go wrong with these stocks. My three stocks in particular offer excellent diversification, as each of the exchanges has its own advantages and disadvantages.

It should be particularly emphasized that the Nasdaq also includes Scandinavian stock exchange operators, which also contributes to diversification and offers interesting growth opportunities.

If you look at historical performance, Euronext would be the clear outperformer and therefore the best choice over the last 10 years.

Someone ne idea or explanation why it went so down here tonight? Am not quite sure... thanks!