The financial crisis is wreaking havoc with our stock markets. Can NYSE Euronext
So what's the story, morning glory?
What Fools say:
Here's how NYSE's CAPS rating stacks up against some of its peers and competitors:
Stock |
Market Cap (Billions) |
Trailing P/E Ratio |
CAPS Rating (Out of 5) |
---|---|---|---|
CME Group |
$14.4 |
15.9 |
**** |
NYSE |
$6.8 |
8.1 |
***** |
Nasdaq OMX Group |
$5.9 |
7.6 |
**** |
Knight Capital Group |
$1.3 |
9.1 |
***** |
Investment Technology Group |
$1.0 |
8.8 |
*** |
Data taken from Motley Fool CAPS on 10/29/08.
CAPS player dweelambee breaks into song over the NYSE's unique market position:
Moat, Moat, Moat, your boat [gently] down the stream
merrily, merrily, merrily, merrily, life is but a dream
The strongest negative comment I could find was kahunacfa's complaint about "the biggest and best stock market in the World" trading at an unreasonable price-to-earnings ratio of 25 times earnings. But that was written in April, and the picture looks different now. "The stock is a BUY at about $25-$35 a share," Kahuna said. "It is a SELL at $66-$70." So now the biggest bear looks like a bull, after all.
What management does:
It's kind of funny to see such massive (albeit slowing) growth from one of the oldest financial institutions in the world. The NYSE is a Rule Breakers pick and the Nasdaq an Inside Value choice -- soon we'll start to build houses upside-down, put salt in our coffee, and pour sugar on the steak. But of course, some of that growth comes from the NYSE-Euronext merger in 2007.
The more substantial and impressive trend here lies in the margin table. How often do you see a major merger leading to such dramatic efficiencies, and all in just 18 months?
3/07 |
6/07 |
9/07 |
12/07 |
3/08 |
6/08 |
|
---|---|---|---|---|---|---|
Operating |
31.7% |
37.5% |
42.4% |
45.6% |
47.9% |
49.1% |
Net |
9.4% |
11.1% |
14.4% |
15.5% |
16.7% |
16.9% |
FCF/Revenue |
7.6% |
7.5% |
12.7% |
12.6% |
14.1% |
12.5% |
Growth (YOY) |
3/07 |
6/07 |
9/07 |
12/07 |
3/08 |
6/08 |
---|---|---|---|---|---|---|
Revenue |
135.0% |
135.6% |
148.2% |
75.0% |
87.6% |
62.3% |
Earnings |
438.3% |
264.8% |
284.2% |
213.7% |
232.2% |
145.6% |
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says:
Take a look at the stock chart for any major company you like -- you'll see trading volumes inching up as the mortgage bubble let out air and the financial markets fell into the abyss. Last week, for example, 164 million shares of Wal-Mart
Weak markets and strong markets beget heavy trading. It's the mediocre periods that give NYSE pause. So I expect some signs of life from the venerable exchange on Friday. Forget the third-quarter figures and look for the fourth-quarter outlook. It'll be the first true barometer we get on the health of Wall Street.