· Posted 05/20/2022
Intercontinental Exchange Inc
Relative Return Over Time
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To summarize in plain language, ICE is a solid business with good margins and ROE. It has room for dividend growth, buybacks
or both as well as further upside from the data services it provides to institutions around
the globe. ICE will likely outperform in this market environment because of its moat that
allows them to charge high fees on their products/services without having much competition
From a value perspective, ICEs current price is very attractive. It trades at a discount to its book value and has a lot of room for growth in the future. ICE is an excellent company with a strong moat, good margins and solid cash flow generation.
The stock has fallen -30% from its highs but I believe it will outperform the SP500 over the next 5 years as institutions are still trading on NYSE and other exchanges
that ICE owns. Furthermore, data services have become more important than ever before as we see more automation in our lives (self-driving cars) which will drive further demand for data services from ICEs business units.