Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Nasdaq Takes No Prisoners

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

I have to take my hat off to Bob Greifeld, the CEO of Nasdaq OMX (Nasdaq: NDAQ  ) . The company's second-quarter earnings were solid and the integration of Nordic exchange operator OMX -- no small task -- is well ahead of schedule. This vindicates Greifeld, who had previously asserted that his management team has a "maniacal focus on execution." [Full disclosure: I recommended Nasdaq Stock Market in the May 2007 issue of Motley Fool Inside Value.]

GAAP earnings per diluted share of $0.48 were $0.02 ahead of the analyst consensus, rising 23% from adjusted EPS in the prior-year quarter. Market volatility has promoted higher trading volumes in Nasdaq's traditional equities business and in its new derivatives operations.

If you're just thinking tech company listings, you haven't kept up
This is not your grandfather's Nasdaq. Once synonymous with high-tech listings, the company has made a big push into the lucrative business of derivatives with the acquisition of the Philadelphia Stock Exchange, the third-largest U.S. options market. With 17% of the U.S. equity options market, Nasdaq trails only CME Group (Nasdaq: CME  ) and the International Securities Exchange (part of Deutsche Borse).

Looking forward, investors should continue to track the ongoing integration of OMX and the Philadelphia and Boston exchanges. Furthermore, the September launch of its pan-European market, Nasdaq OMX Europe, is an important milestone in Greifeld's ambition to replicate Nasdaq's success in Europe.

With the loosening of regulation in European financial markets, a number of new competitors have emerged. Project Turquoise, which counts Goldman Sachs (NYSE: GS  ) , Morgan Stanley (NYSE: MS  ) , Merrill Lynch (NYSE: MER  ) , and Citigroup (NYSE: C  ) among its founding members, is slated for a full launch in September.

One of the best bargains on Nasdaq may be Nasdaq itself
Even after yesterday's run-up, Nasdaq OMX shares are changing hands at 13.1 times next year's earnings -- quite a bargain compared to the S&P 500, which is trading at 19.1 times estimated 2009 earnings. Barely a week ago, I wrote that competitor NYSE Euronext (NYSE: NYX  ) looks cheap (the current share price is 11.2 times 2009 earnings). Outrageously cheap would be overstating things, but it's not every day that investors have the opportunity to buy shares in the two dominant firms in a global industry at what look like very reasonable prices.

Related Foolishness:

Alex Dumortier, CFA, has no beneficial interest in any of the stocks mentioned in this article. Nasdaq OMX Group is a Motley Fool Inside Value pick. NYSE Euronext is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 702811, ~/Articles/ArticleHandler.aspx, 10/21/2016 5:27:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,162.35 -40.27 -0.22%
S&P 500 2,141.34 -2.95 -0.14%
NASD 5,241.83 -4.58 -0.09%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/20/2016 4:00 PM
NDAQ $65.73 Down -0.67 -1.01%
Nasdaq CAPS Rating: *****
C $49.58 Up +0.10 +0.20%
Citigroup CAPS Rating: ***
GS $174.51 Down +0.00 +0.00%
Goldman Sachs CAPS Rating: ***
MER.DL2 $11.64 Down +0.00 +0.00%
Merrill Lynch & Co… CAPS Rating: *
MS $32.90 Down -0.03 -0.09%
Morgan Stanley CAPS Rating: ****
NYX.DL $0.00 Down +0.00 +0.00%
NYSE Euronext CAPS Rating: *****