Intercontinental Exchange Stock: 7 Straight Green Days, Up 13%

Intercontinental Exchange Stock: 7 Straight Green Days, Up 13%

A multi-day run for Intercontinental Exchange has investors looking closer at the fundamental picture behind the momentum.

Shares of Intercontinental Exchange (ICE) have gained a cumulative 12.7% over a streak of 7 consecutive trading days. That run has added about $9.9 billion to the company's market value, which now stands at about $88 billion. For anyone holding the stock, the move marks a significant short-term gain.

ICE Versus The S&P 500, Streak And Beyond

Here is how ICE stock stacks up against the S&P 500 over the streak and the periods around it:

What do the numbers say about this streak?

Over the same 7 trading days, the S&P 500 returned -1.0%. The market may be weighing fundamentals that stand out against broader index medians. It also must be noted that on July 30, the final day of the streak, ICE agreed to acquire MarketAxess for about $6 billion in cash. The company's operating margin over the last twelve months is 41.3%, compared to an S&P 500 median of 18.4%.

At the same time, the stock trades at a price-to-earnings multiple of 21.8, below the S&P 500 median of 24.0. While streaks are not unusual, 21 S&P 500 stocks are currently on winning streaks of 3 days or more.

How should an investor treat this information?

A streak is a measure of attention and momentum, not a signal to buy or sell. These runs always end, often without warning. The disciplined response is to use the new price as a prompt to check your thesis on the business.

The data on margins and valuation provides a starting point for assessing whether the business fundamentals still support the stock's current market value after its recent climb.

A run like this is worth respecting, and worth testing: the momentum that lasts is usually the kind management itself is underwriting. Our Guidance Momentum screen tracks the stocks whose companies just raised their own forward numbers.

And for anyone who would rather own the whole group than one company's story, a U.S. broker-dealers & securities exchanges ETF like IAI might be a good option. That way no single company's next surprise decides the outcome.

Winning Streaks Are How Portfolios Get Concentrated

A stock that rises day after day quietly becomes a bigger share of the portfolio holding it. How much damage any single position could do to your net worth is a question with a precise answer. The Trefis Wealth team computes it for investors professionally, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.