Intercontinental Exchange: Recent pull-back is buy opportunity

As noted, while FY2009 revenue and earnings will not overwhelm, look for electronic trading, energy products trading, and clearing house function revenue streams to resume solid growth by mid-FY2010.

Further, ICE's Europe operations remain a market with a large potential upside. Also, forecasts that the de-leveraged, post-financial crisis era would slow energy product trading volumes to a crawl appear to have been premature: oil futures and related products are hanging in there, and a sustained rebound in oil prices in FY2010 would bolster that trend. Agriculture futures revenue should also register impressive gains in FY2010.

Technically, ICE's pull-back to the $80 range, following a rise from $50 to $120, looks like a correction: the long-term uptrend remains intact. The First Call FY2009/FY2010 EPS estimates for ICE are $4.41 to $5.16.

Stock Analysis: Intercontinental Exchange is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in ICE now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your ICE position before December 2009. Sell/Stop Loss if you were to buy shares in this company: $45.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.