CME Group Inc (CME), NYSE Euronext (NYX), NASDAQ OMX Group, Inc. (NDAQ): This Exchange Has a Bright Future, But Expensive Shares

Other exchanges: NYSE Euronext, NASDAQ OMX Group, CBOE

As far as other publicly-traded exchanges go, I consider NYSE Euronext (NYSE:NYX) and IntercontinentalExchange Inc (NYSE:ICE) to be the same thing. In late 2012, NYSE Euronext (NYSE:NYX) agreed to be acquired by IntercontinentalExchange Inc (NYSE:ICE), and the transaction is expected to close in the second half of the year. NYSE Euronext (NYSE:NYX) consists of six equities exchanges and derivatives exchanges, and IntercontinentalExchange Inc (NYSE:ICE) operates futures and OTC exchanges for a variety of energy and commodity products. I would personally stay away from this one until the acquisition closes, as there are several regulatory hurdles to clear before it can be completed.

NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) provides trading, technology, and public company/listing services all over the world. The company’s revenues have been very volatile in recent years, as its revenues depend mostly on trading volumes. The early signs point to low double-digit revenue growth in both 2013 and 2014, as well as higher margins, which should translate into nice earnings growth. In fact, earnings of $2.58 per share this year are projected to rise to $3.00 and $3.40 in 2014 and 2015, respectively, for annual earnings growth of 16% and 13%. NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) trades at a relatively cheap valuation of just 12.6 times this year’s earnings, making it look like the most reasonably valued of this group.

What to do?

As far as CME Group Inc (NASDAQ:CME) goes, I’m going to wait and see what happens after the company’s earnings report. After the recent gains, I think the company needs to post an excellent quarter or shares need to cool off a bit. If the earnings are less-than-stellar, we may see a pullback over the coming weeks to a more appealing entry point.

The article This Exchange Has a Bright Future, But Expensive Shares originally appeared on Fool.com and is written by Matthew Frankel.

Matthew Frankel has no position in any stocks mentioned. The Motley Fool recommends NYSE Euronext. Matthew is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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