NDAQ - NASDAQ Stock Market Inc - very strong history of beating its earnings estimates - average margin of surprise nearly 30%

Shares of NASDAQ Stock Market Inc. (NDAQ) appear ready to test upside resistance levels. The stock has risen as the majority of the covering brokerage analysts have increased their full-year forecasts. The NASDAQ is the world's largest electronic stock market. With approximately 3800 companies, the exchange lists more companies and trades more shares per day than any other U.S. market. NDAQ's leadership has been aided by IPOs - over the last five years, more IPOs have been listed on NASDAQ than any other U.S. exchange. NASDAQ has also achieved new market share highs in the trading of U.S. listed equities, matching a record high 28.8% of traded volume. The company expects to continue growing as technology continues to facilitate market accessibility to potential investors across the world. NDAQ has a very strong history of beating its earnings estimates, having topped expectations during three out of the previous four quarters. The average margin of surprise during this period has been six cents per share, or nearly 30%. Second-quarter income totaled 39 cents per share versus 22 cents per share a year prior. "Our ability to capture market share has grown NASDAQ into the largest single pool of liquidity for trading cash equities, creating a robust platform for growth," said Bob Greifeld, President and Chief Executive Officer of NASDAQ. "To that end, we believe our business is poised to deliver strong results over the second half of the year through continued product innovation and diversification." Full-year profit forecasts have been raised by nine of the 12 covering brokerage analysts during the past 30 days. This revision has occurred as the U.S. equity markets have rebounded. Notably, forecasts have also been raised for next year as well. The consensus forecasts call for the exchange to earn $1.39 this year and $2.00 next year. The positive revisions have pushed the stock towards a 52-week high. NDAQ had previously spent a solid four months, from May to August trading within a fairly tight range of $30 and $34. On Sep 12, the stock pushed beyond this area and has since established a fairly smooth up trend. A very nice trend has developed that seems to be supporting this shorter term drive higher. It begins from the low of Aug 16, touches the lows of Sep 17 and 25, and continues higher to support current prices. Within the last few days prices dipped lower and touched this trend line, found some additional support in the 21-day moving average, and rebounded nicely. Prices now seem poised to challenge two key areas at $42 and $43. $42 seems to be the "real" top, with prices unable to maintain trade above this point, and a higher close coming only once in two weeks. Sustained price action above the $42 level should position NDAQ to advance toward $43, which is the official near-term high as well as the 52-week high. Movement higher should continue to be supported by the shorter term trend line and the 21-day moving average. The MACD histogram study has also bottomed out and it appears that the shorter term average is now moving ahead of its longer term counterpart. A push beyond these key areas at $42 and $43 will establish new short term and 12-month highs, placing NDAQ in position to make a run at its all time high of $46. A positive third-quarter earnings surprise (as is being suggested by the most accurate estimate) could be the catalyst for such a move. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home