Barron's Says Nasdaq OMX (NDAQ) Shares Are A Steal
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In this week's Barron's, it had an extremely positive piece on Nasdaq OMX (Nasdaq: OMX). Nasdaq's shares have fallen by more than 50% since hitting a high of $50.47 last November. Nasdaq's shares have obviously sold off as the stock market has, but there are also concerns that the Nasdaq overpaid, when it shelled out $4.2 billion for the OMX.
Barron's said investors should be careful to just view the Nasdaq through "the lens of the U.S., where competition is brutal and conditions are soft." In fact, only 15% of Nasdaq OMX's revenues come from U.S. equity trading. Globally, financial markets are booming with with the great wealth growing in China and India.
Exchanges are incredibly attractive businesses, essentially acting as tollbooths, and whose revenues double every few years. The Nasdaq OMX has over 3,900 listings representing $5.5 trillion in total market value. Barron's feels that the Nasdaq OMX has an extraordinary opportunity to be the leader in a rapidly consolidating industry with incredible growth potential as wider range of products continue to get traded.
Chief Executive Robert Greifeld said, "the revenue-growth prospects dwarf any other time in my history at the Nasdaq. Our master plan is to develop massive scale against an efficient low-cost platform."
Coming this September Nasdaq will launch a Pan-European market and it hopes to capture 20% of the trading volume in the 300 most active shares in Europe. Over the past two years, Nasdaq increased its shares executed on the NYSE to about 25%, from zero two years ago.
Nasdaq has transformed itself from an exchange focused solely on the US to a global player that should continue to realize cost savings and reap the benefits of added global growth.
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Barron's said investors should be careful to just view the Nasdaq through "the lens of the U.S., where competition is brutal and conditions are soft." In fact, only 15% of Nasdaq OMX's revenues come from U.S. equity trading. Globally, financial markets are booming with with the great wealth growing in China and India.
Exchanges are incredibly attractive businesses, essentially acting as tollbooths, and whose revenues double every few years. The Nasdaq OMX has over 3,900 listings representing $5.5 trillion in total market value. Barron's feels that the Nasdaq OMX has an extraordinary opportunity to be the leader in a rapidly consolidating industry with incredible growth potential as wider range of products continue to get traded.
Chief Executive Robert Greifeld said, "the revenue-growth prospects dwarf any other time in my history at the Nasdaq. Our master plan is to develop massive scale against an efficient low-cost platform."
Coming this September Nasdaq will launch a Pan-European market and it hopes to capture 20% of the trading volume in the 300 most active shares in Europe. Over the past two years, Nasdaq increased its shares executed on the NYSE to about 25%, from zero two years ago.
Nasdaq has transformed itself from an exchange focused solely on the US to a global player that should continue to realize cost savings and reap the benefits of added global growth.
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