ClearBridge Investments: “Intercontinental Exchange (ICE) is a Resilient Business at a Good Valuation”

ClearBridge Investments, an investment management company, released its “ClearBridge Value Equity Strategy” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund underperformed its Russell 1000 Value Index. The fund faced losses from all the 11 sectors in which it was invested. For more information on the fund’s top picks in 2022, please check its top five holdings.

In the second quarter investor letter, ClearBridge Investments discussed its ClearBridge Value Equity Strategy portfolio. During the quarter, the fund added stocks like Intercontinental Exchange, Inc. (NYSE:ICE). Intercontinental Exchange, Inc. (NYSE:ICE), founded in 2000, operates in exchanges, clearinghouses, and provides listing and mortgage services. It is headquartered in Atlanta, Georgia. The stock of Intercontinental Exchange, Inc. (NYSE:ICE) closed at $104.30 per share on August 8, 2022, and has a market capitalization of $58.247 billion. One month’s return of Intercontinental Exchange, Inc. (NYSE:ICE) rose to 11.74% and its shares lost 12.79% of their value over the last 52 weeks.

Here is what ClearBridge Investments specifically discussed about Intercontinental Exchange, Inc. (NYSE:ICE) in its Q2, 2022 investor letter:

“Intercontinental Exchange, Inc. (NYSE:ICE) operates global financial exchanges and clearing houses, which we believe is a resilient business at a good valuation. One of our key tactics in a potential recessionary environment is to focus on stocks where earnings and cash flow will hold up better than the market. ICE fits the bill as it benefits directly from volatility in financial markets, including in commodities where we are seeing major price swings. During the first half, ICE earnings estimates came up modestly, but its valuation multiple fell over 30%. Some of this weakness is due to ICE’s planned acquisition of Black Knight (BKI), which we think makes strategic sense. However, it is being done as Black Knight’s business is projected to slow as housing activity cools on higher mortgage rates, and the deal may also face regulatory scrutiny. Regardless, the recent weakness in the stock gave us a price below our estimate of long-term business value for a solid and resilient business and we acted accordingly.”

Although ClearBridge Investments invested in Intercontinental Exchange, Inc. (NYSE:ICE), it is not on the list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held Intercontinental Exchange, Inc. (NYSE:ICE) at the end of the first quarter which was 56 in the previous quarter.

We discussed Intercontinental Exchange, Inc. (NYSE:ICE) in another article and shared Kerr Neilson’s Platinum Asset Management’s views on the stock. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

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

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