Thursday, May 25, 2006

Euronext information

To be sure, the recent news of NYSE's bid to join forces with Euronext is exciting. Here is a link to Euronext's annual report that's full of good background information. If you flip to page 13 (page 17 of the PDF) you can see some of the synergies that would result from a NYSE/Euronext unification.

In addition to creating a company that would collect revenue for up to 12 hours/day a merger with Euronext would catapult NYSE into a "wide range of interest-rate, equity, index, commodity, and
currency derivative products" (page 13 of Euronext annual report).

Tuesday, May 16, 2006

More Analyst Garbage

In light of the recent analyst reports from Bear Stearns and Raymond James, NYSE ArcaNews felt it appropriate to remind folks about the lousy track record that these wizards have when it comes to assessing how the market will value shares of NYX (or AX as the case was prior to 3/06).

If you click the chart above (it'll enlarge and) you'll notice that many of the analysts that cover NYX have been consistantly wrong for quite some time.

Bearish Stearns
Many of these analysts have demonstrated that they don't know how to determine how the market will value shares of companies in NYX's competitive landscape. For example, Dan Goldberg, the author of yesterday's Bear(ish) Stearns report (incidentally, the NYSE and the SEC fined Bear $250 million recently for violating rules), piped up on May 6, 2004 and slapped the same rating on CME as he did yesterday on NYX. "Peer Perform" is the classification that Goldberg gave to both CME in '04 and NYX yesterday. On May 6, 2004, CME closed at $116.36. Imagine taking his research to heart and either selling CME short at those levels or simply selling CME or not buying it due to Goldberg's call.

As of this posting, CME is trading at $462/share! Talk about contrarian indications!

Raymond James
Not to be outdone, Michael Vinciquerra, the scribe of today's Ray Jay report, demonstrated his difficulty with forecasting a stock's performance during last summer. On July 7, 2005 Mr. Vinicquerra downgraded AMTD which closed that day at 14.05 (adjusted for dividend). Not even a year later, AMTD is trading at ~17/share.

Time and time again, analysts like most of the ones covering NYX, have gotten it wrong. It's incredible that the buy-side is still willing to pay for insight that a 3rd-grader could have. It's truly a wonder that these analysts have managed to stay relevant. Perhaps even more amazing is how Wall Street reacts to their nonsense.

Ultimately, facts prevail. At that point it becomes clear if analysts were right with their assessments. Fortunately, there's enough history, and an easily accessible record of bucket-headed calls (see to guide investors towards what authors/reports are worth reading -- and which authors/reports aren't worth wasting any time (or soft dollars) on.

Wednesday, May 03, 2006

Secondary Smoke

"In the short-term, the market is a voting machine, in the long-term it is a weighing machine."- Benjamin Graham

If you've been a regular NYSE ArcaNews reader you're well aware of Graham's axiom due to the frequency that it's been cited here over the years. In light of tomorrow's 25 million share secondary, it's interesting to look at some secondary offerings from 2003 to see how the market has digested the secondary offerings a few years ago.

Below is a table that illustrates how the market has responded to secondary offerings over time. As you can see, on average, the companies that had a secondary offering have increased the value of their stock by 42%.

If you look at the charts of these companies you'll notice that there was volatility surrounding the announcement of the secondaries, however, true to Graham's words, over the long run, these secondary offerings not only didn't provide a head wind for stock growth, but interestingly enough, shareholders of these companies have been rewarded over time for their loyalty.
(source for secondary info:
Close Day of Sec. An.
Close on 5/2/2006
% Δ
Link to Historical Price
Anteon Intlv
Pain Therapeutics
OGE Energy
Pacific Energy Partners
Bell Microproducts
AvalonBay Communities
Regency Centers


Free Web Counters