Energy trading volumes remain high despite a general softening in volumes for the exchanges, fueling growth in the exchanges space beyond the current upside seen from investor optimism and investor interest in the yield, says Richard Repetto, Principal at Sandler O’Neill + Partners, L.P.
“Energy has been the only asset class whose volume has been robust earlier and has moderated more of late. You look at cash equities, you look at the majority of the futures volumes, the option volumes to a lesser extent, it’s following the trend of volatility which is downward,” Repetto said.
Repetto’s favorite pick in the exchange space is the IntercontinentalExchange (ICE). He says the stock has performed well over the last six quarters, and it primarily focuses on energy, trading oil, gas oil, natural gas and other hydrocarbons.
“ICE has set record revenues and record net income in each of its last six consecutive quarters. So, ICE is my top pick in the exchange space, given that track record, their position in CDS clearing and a very, very innovative management team,” Repetto said.
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