Interactive Data On A Roll – Analyst Blog

Leading financial information vendor Interactive Data Corp. (IDC) announced that it will provide end-of-day index values as well as analytical capabilities for ten of Accretive Asset Management LLC’s Bulletshares USD Corporate Bond Indices.

 

 Accretive’s Bulletshares USD Corporate Bond Indices serves as a basis for a series of exchange-traded funds (ETFs). To obtain Bulletshares’ end-of-day index value, Accretive is opting for Interactive Data’s Basket Calculation Service. The innovative Web-based service was launched in 2007 to facilitate calculation of intraday analytical valuations for equity and fixed income ETFs.

 

Moreover, Interactive Data announced that more than 25 major international financial institutions are using its valuation services for over-the-counter (OTC) derivatives to facilitate complex calculations. In September 2008, an alliance was formed between Interactive Data’s Data Pricing and Reference Data business and Prism Valuation, following which the company provided valuations for complex financial instruments such as OTC derivatives and structured products.

 

Notably, Interactive Data also announced that it has enhanced the interest rate swap valuation service capabilities through its Pricing and Reference Data business, which will help its customers evaluate portfolios encompassing OTC derivatives.

 

We believe that the financial services provided by Interactive Data’s Pricing and Reference Data business will attract a wide range of institutional clients worldwide, including custodians and asset managers, thereby driving healthy revenues from its Institutional Services segment.

 

Interactive Data is a leading global provider of financial and business information to financial institutions and retail investors. Interactive Data has grown through the introduction of innovative products and through acquisitions.

 

Interactive Data delivered first quarter revenue with a modest 5.8% growth over the prior-year quarter, driven by strength in its fixed income evaluation business, reference data and also its Web-based solutions business. However, earnings per share missed the Zacks Consensus Estimate by 3 cents.

 

Interactive Data’s growth strategy includes expanding its business in Europe, wining new clients and making acquisitions. Interactive Data operates in highly competitive markets, where it is pitted against other players providing financial market data, analytics and related services. We believe stiff competition from Bloomberg L.P., Dow Jones & Company Inc. and Thompson Reuters, as well as integration risks pose threats to Interactive Data.

 

We have a short-term Sell rating on Interactive Data shares, implying a Zacks #4 Rank.