On Mar 10, NYSE Euronext Inc. (NYX) announced that it has sold its prime minority stake in NYSE Liffe U.S. to DRW Ventures LLC, a unit of DRW Trading Group (DRW). This brings the total number of outside owners in NYSE Liffe to six. The other five owners are Citadel Securities, Goldman Sachs Group Inc. (GS), Morgan Stanley (MS), UBS AG (UBS) and GETCO.
Both GETCO and DRW are large and prime business magnets in high-frequency trading market. Along with other owners, the two private firms will provide liquidity, efficiency, transparency and a competitive edge to NYSE Liffe’s already strong derivative and futures industry in the U.S.
The move was also taken to bar its chief rival group CME Group Inc. (CME) from acquiring an ownership in NYSE Lifffe, both of which are strong competitors in U.S. derivative trading market. However, NYSE will continue to be largest shareholder in NYSE Liffe.
Estimate Revision Trend
Over the last 30 days, ten of the 18 analysts covering the stock have increased the estimates for the first quarter of 2010, while three downward revisions were witnessed. Currently, the Zacks Consensus Estimate for the first quarter is operating earnings of 55 cents per share, which would be up by 28.3% from the year-ago quarter.
The fewer number of downward estimate revisions for the first quarter indicates a likelihood of upward pressure on the performance of the stock in the near term. The appreciation justifies the positive growth outlook for the stock going ahead.
With respect to earnings surprises, the stock has been steady over the last four quarters with all positive surprises. The average remained positive at 14.2%. This implies that NYSE has surpassed the Zacks Consensus Estimate by 14.2% over that period.
NYSE’s fourth quarter earnings per share of 58 cents surpassed the Zacks Consensus Estimate on expense management and successful integration of NYFIX acquisition. However, top-line declined on weak volumes. The outstanding technical performance and a diverse business model has enabled the company to enter new markets on a low cost and highly flexible platform, offering value addition to its clients and creating additional sales opportunities. We believe the company’s consolidation or splitting strategies are aimed towards the development and enhancement of its business over the peer group.
About NYSE Liffe
NYSE Liffe U.S. is a fully electronic, liquid market for 100 ounce (oz) gold futures, 5,000 oz silver futures, options on gold and silver futures and mini-sized 33.2 oz gold and 1,000 oz silver futures as well as equity index futures based on MSCI Emerging Markets, MSCI EAFE and MSCI USA indices. NYSE Liffe U.S. has plans to further expand into futures on other asset classes, including U.S. interest rate products.
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Read the full analyst report on “MS”
Read the full analyst report on “UBS”
Read the full analyst report on “CME”
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