ICE’s Mixed Bag

Close ICE Off

By Bryan Bottarelli
Tuesday, August 04, 2009 10:22 AM EDT
Tue, 4 Aug 2009 14:22:00 GMT

Dear Bottarelli Research Member,

This morning, shares of Intercontinental Exchange (ICE – NYSE) are all over the map. earlier today, ICE posted income of $72.1 million ($0.97 per share), down from the $84.9 million ($1.19 per share) they reported one year earlier. But on the flip-side, revenues increased 27% to $250.4 million, beating the Thomson Reuters’ revenue expectation of $243 million. As a result, shares of ICE have traded both higher and lower by $2.00 within the first 30 minutes of action.

ICE

In addition to this earnings report, I found it interesting that ICE’s board approved a program to repurchase up to $200 million in common stock (totaling 2.1 million common shares) between now and February 28th. This indicates that ICE’s insiders consider the stock undervalued anywhere below the $100 level. But at the same time, uncertainty remains about the threat of the government limiting energy futures trading. If any news about this hits the wire, ICE will fall sharply. Therefore, since the earnings-based pop occurred for all but a few seconds this morning, it’s time to cut this one loose. Sell.

Aside from that play, let’s maintain our hedged ledger of TBT August 50 Calls (TBT HX), PTR August 125 Calls (PTR HE), and SDS August 45 Calls (SSH HS). Thus far, today hasn’t seen too much decisiveness in the markets. Let’s see what comes our way leading into the afternoon. As always, I’ll alert you to any trading actions or new opportunities. But until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

© 2012 CSR Group, LLC. All rights reserved. Published in USA.

Information, opinion, research, and commentary contained herein is obtained from sources believed to be reliable; their reliability, however, cannot be guaranteed. The maxim of Caveat Emptor applies — let the buyer beware. Bottarelli Research does not provide individual investment advice, act as an investment advisor, or individually advocate the purchase or sale of any security or investment.

Investments recommended in this service should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Bottarelli Research reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscriber’s initials will be used unless express written permission has been granted to the contrary.

CSR Group, LLC expressly forbids its writers from having a financial interest in any security recommended to readers. Furthermore, all employees and agents of CSR Group, LLC and its affiliate companies must wait 24 hours before following a published recommendation.

Bottarelli Research alerts contain time-sensitive information, and are published and distributed to members with urgency. Because of this, not all published materials can be adequately proofread, and an occasional spelling or grammar error may exist.


Other Options Alerts From August 2009