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Intercontinental Exchange Posts Solid Q4 & December ADV

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Intercontinental Exchange, Inc. (ICE - Free Report) has reported a solid average daily volume (ADV) for the fourth quarter of 2018. ADV climbed 20%, while Agriculture and Metals increased 14% year over year. Volumes were driven by better numbers across all the months of the quarter.

The exchange operator witnessed record Emissions ADV, surging 72% year over year in the fourth quarter. While Gilt ADV improved 14% year over year, NYSE cash equities ADV surged 45% year over year.

With respect to monthly volumes, the company reported 17.6% year-over-year increase in Financials volume that rose to 2.7 million contracts per day. However, Agriculture and Metals ADV of 0.3 million contracts decreased 11.7%. Also, Commodities volume, which averaged approximately at 2.6 million contracts per day, was down 6.7% year over year. There were 20 trading days in December.

Energy volume dropped about 6% to 2.3 million contracts per day. Interest Rate volume scaled up 18.6% to a about 2 million contracts per day, whereas Equity Index volume increased 15.4% to 0.7 million contracts. Foreign exchange volume was up 12.9% to nearly 0.04 million contracts.

Revenues per contract were 12 cents for the month, down 7.7% year over year.

Shares of Intercontinental Exchange have underperformed the industry in a year. The stock has gained 3.5% compared with the industry’s rally of 12.1%.



The company’s product portfolio, along with a broad range of risk management services, strategic buyouts and a robust capital position will likely help the stock retain its growth momentum. This, in turn, would also help the stock turn around in the near term.

Intercontinental Exchange is scheduled to report fourth-quarter 2018 results before the market opens on Feb 7. The Zacks Consensus Estimate for quarterly earnings is pegged at 88 cents on revenues of $1.3 billion, reflecting 20.6% and 9.6% year-over-year growth, respectively.

Our proven model conclusively shows that the company is likely to deliver a positive surprise this quarter. This is because the stock carries the right mix of ingredients for an earnings beat — a favorable Zacks Rank #2 (Buy) and an Earnings ESP of +4.15%. The company came up with positive earnings surprises in the trailing three quarters.

Recently, securities exchanges, namely CME Group Inc. (CME - Free Report) and MarketAxess Holdings Ltd. (MKTX - Free Report) also posted their respective monthly volumes.

While CME Group’s 2018 ADV of 19.2 million contracts per day grew 18% year over year, MarketAxess has reported a trading volume of $131.2 billion for 2018.

Another Stock That Warrants a Look

Another stock from the finance sector space that investors might want to consider is MGIC Investment Corporation (MTG - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here..  

MGIC Investment provides private mortgage insurance and ancillary services to lenders and government sponsored entities in the United States. The company delivered a 33.33% positive surprise in the last reported quarter.

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