The market is looking ripe for a pullback after an impressive run up. One stock I will be looking to pick up is an undervalued 4.5% yielder in the unloved and extremely beaten down financial sector.
NYSE Euronext (NYX) – “NYSE Euronext, through its subsidiaries, operates securities exchanges. It operates various stock exchanges, including the New York Stock Exchange (NYSE), NYSE Arca, Inc., and NYSE Amex LLC in the United States; and five European-based exchanges that comprise Euronext N.V. the Paris, Amsterdam, Brussels, and Lisbon stock exchanges, as well as the NYSE Liffe derivatives markets in London, Paris, Amsterdam, Brussels, and Lisbon.” (Business Description from Yahoo Finance)
8 reasons NYX is undervalued at under $28 a share:
1. NYSE Euronext is selling at the bottom of its five year valuation range based on P/S, P/E, P/B and P/CF.
2. It has an A+ rated balance sheet and yields a robust 4.5%
3. Insiders bought $1mm in new shares in August.
4. The eventual resolution of the Deutsch Borse merger should remove a headwind from the stock.
5. It is selling at a forward PE of just 9 which is a 50% discount to its five year historical average.
6. NYX looks likes it has put in a short term technical support level at $25 a share (See Chart)
7. It is selling at a five year projected PEG of just .8 which is a 20% discount to its five year historical average
8. NYSE Euronext is selling under analysts’ price targets. S&P currently has a $41 price target on NYX and the median analyst target on NYX is $40
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in NYX over the next 72 hours.