Is Intercontinental Exchange (ICE) a Smart Long-term Buy?

Del Principe O’Brien Financial Advisors recently released its third-quarter investor letter – a copy of which is available for download here. The fund posted a return of 8.6% for the quarter, underperforming its benchmark, the S&P 500 Index which returned 8.9% in the same quarter. You should check out Del Principe O’Brien Financial Advisors top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Del Principe O’Brien Financial Advisors highlighted a few stocks and Intercontinental Exchange Inc. (NYSE:ICE) is one of them. Intercontinental Exchange Inc. (NYSE:ICE) is a technology company. Year-to-date, Intercontinental Exchange Inc. (NYSE:ICE) stock gained 21.9% and on December 17th it had a closing price of $112.79. Here is what Del Principe O’Brien Financial Advisors said:

“As the above quote suggests, Jeffrey Sprecher, founder, chairman, and CEO of our most recent investment, Intercontinental Exchange (ICE), knows something about making the right acquisitions, at the right time, for the right reasons. ICE began as an online marketplace for energy trading in the late 1990s before electronic trading was a common practice. In 2000, Sprecher and his colleagues launched their company under “Intercontinental Exchange,” a name suggesting that their innovative brokerage was not bound by national borders and could serve a global market. In the last twenty years, ICE has done just that by making several bold acquisitions of global brokerages and clearing agencies, including the International Petroleum Exchange, the New York Board of Trade, Creditex, and NYSE Euronext (otherwise known as the New York Stock Exchange).

ICE’s acquisition of NYSE Euronext in a cash-and-stock deal valued at about $11 billion in November 2013 is particularly notable because it signifies how technology in the trading industry was changing. The days of blazer-wearing brokers calling out bids in the pit were about to give way to the era of high-speed computerized trading. In the last decade, we’ve seen how electronic trading has reduced the cost of buying and selling stocks and has made trading more accessible to your average investor.

Sprecher has had tremendous success growing ICE by changing and adapting to the rapidly evolving global exchange industry. By doing so, ICE has positioned itself as (in Sprecher’s words) “a diverse operator” in the industry, which includes being a player in global financial and commodity markets, clearing and technology infrastructure, and data services. In September, ICE further expanded its capabilities by acquiring digital lending platform provider Ellie Mae for $11 billion from private equity firm Thoma Bravo. With this move, ICE aims to accelerate the automation of mortgage origination in the trillion-dollar residential mortgage industry. This acquisition also demonstrates how adept ICE is at anticipating changes in financial technology and how it pushes to make them happen.”

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In Q3 2020, the number of bullish hedge fund positions on Intercontinental Exchange Inc. (NYSE:ICE) stock increased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in ICE’s growth potential. Our calculations showed that Intercontinental Exchange Inc. (NYSE:ICE) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.