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Intercontinental Exchange Buys ICE Endex, June ADV Surges

Intercontinental Exchange Inc. ICE has acquired the remaining 20% stake in ICE Endex shares from N.V. Nederlandse Gasunie. The acquisition adds capabilities to the acquirer’s European gas and power portfolio.

With this acquisition, ICE Endex became a fully owned subsidiary of Intercontinental Exchange. Nederlandse Gasunie had intensified focus to enhance its Dutch TTF gas futures and options. Thus, the acquisition will help Intercontinental Exchange cater to the European and global natural gas markets.

Intercontinental Exchange eyes strategic buyouts to consolidate its portfolio.  The acquirer’s acquisition history includes Standard & Poor’s Securities Evaluations, Inc., Credit Market Analysis Limited, National Stock Exchange and Atrium among others. In its recent endeavor, the company has agreed to acquire Global Research division’s index platform from Bank of America Merrill Lynch to ramp up its index services.

These efforts reflect the company’s diversifying aims to emerge in rapidly growing markets to gain scale and adapt to the changing industry dynamics.

A diversified yet compelling portfolio has been helping the company record an improving average daily volume over the last few months. Recently, the company announced that its June average daily volumes have increased 29% year over year to over 7 million contracts. The improvement stemmed up from a 27% increase in Energy volume and 39% expansion in Financials volume. The company has reported that its second quarter average daily volume has increased 28% year over year.

Shares of Intercontinental Exchange have outperformed the Zacks categorized Securities Exchanges industry, year to date. While Intercontinental Exchange’s shares gained 16.84%, the Securities Exchanges industry has registered an increase of 13.83%. The company’s broad range of products and risk management service; strategic buyouts and enhancement of its capital efficiency; cross-selling and product development opportunities in the long run should continue to drive the shares up.

Intercontinental Exchange is scheduled to report its second quarter earnings results this August. Our proven model states that the Zacks Rank #3 (Hold) exchange is poised for another quarter of earnings beat. This is because it has a favorable Zacks Rank as well as an Earnings ESP of +1.35%. The company has delivered back-to-back positive surprises in the last two quarters.

Stocks to Consider    

Some better-ranked stocks from the insurance industry are CBOE Holdings Inc. CBOE, State National Companies, Inc. SNC and Progressive Corp. PGR.

CBOE Holdings is a leading derivative exchange in the U.S., offering trading in stocks or equity options, index options and exchange traded-products (ETP). The company has delivered positive surprises in three of the last four quarters with an average beat of 4.96%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Progressive provides personal and commercial property-casualty insurance, plus other specialty property-casualty insurance and related services primarily in the United States. The company has delivered positive surprises in two of the last four quarters with an average beat of 4.95%. The stock flaunts a Zacks Rank #1.

State National Companies provides property and casualty insurance in the United States. The company has delivered positive surprises in two of the last four quarters with an average beat of 20.54%. The stock flaunts a Zacks Rank #2.

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