IntercontinentalExchange Inc (ICE) is in an excellent position to gain a large amount of business from the recent FinReg (Financial Regulation) legislation. As an exchange, ICE has gained more derivative business than any other exchange. I quote this comment from Dow Jones at Friday's (June 25) close:
IntercontinentalExchange Inc. (ICE), which already has claimed a dominant position in handling credit-derivative transactions, rose 3.6% to $118.63 in afternoon trading.
On June 16, ICE made a new 12 month high above $129 and closed just under $127. After the market close, there was a "block trade" of 1.2 million shares at $124. The seller was not disclosed. Citi handled the sale. The stock was not well placed.
Subsequently, because of a weak market, the overhang from the block trade, and uncertainty about the FINREG pending legislation, ICE declined to around 114. Friday the stock rallied as noted in the DJ news quote above.
Now, with the death of Robert Byrd, the Senate vote may be delayed and ICE is down at this time to $117.50.
The bill will pass and ICE looks to pick up a lot of business. The chart shows that ICE is in a solid uptrend. Consensus earnings for 2010 is $5.58 vs. $4.50 in 2009.
ICE is a growth company with the catalyst of derivatives trading on their exchange to provide accelerated earnings growth.
Disclosure: Long ICE, short ICE calls