Investment Technology (NYSE:ITG) Grows Market Share in November

Investment Technology Group (NYSE:ITG) increased market share in November by 10 percent year-over-year. From October, they increased market share from 2.55 percent to 2.91 percent.

Commenting on the growth, Ticonderoga said, "ITG reported November ADV of 186m, representing 10% YOY and 11% sequential growth. Looking at market share, it spiked to 2.91% from 2.55% in October. This represents the highest level of market share since 2008. ITG benefited from the MSCI rebalance at the end of November and year-end repositioning by asset managers with a November year-end. Also, given the ongoing outflows we have seen in domestic equity funds, we believe the business mix has continued to shift towards lower capture rate DMA and spread businesses and away from the more traditional long-only business. These dynamics are likely to continue to pressure the capture rate.

"While volume estimates are clearly moving higher given November results, we would expect to see further pressure on the capture rate from here. We are building in December ADV of 149m, representing an estimated market share of 2.6% (vs. 2.56% in 3Q10 and 2.55% in October). We are forecasting 4Q10 ADV of 167m and EPS of $0.20 (vs. consensus of $0.22). Even with the better than expected November results, we still see some downside risk to consensus, and believe estimates should be closer to $0.20."

Ticonderoga maintains a "Neutral" rating on Investment Technology Group (NYSE:ITG), which closed Wednesday at $15.51, up $0.08, or 0.52 percent.