NITE Investment Analysis Report & Stock Research, Knight Capital Group Inc.

Knight Capital Group Incorporated (NITE)

NITE Stock Report

2-Year Price History

View Larger NITE Chart
(8/28 4:00PM)
Open$0 Mkt Cap$1.8 Billion
High$0 52Wk High$20.78
Low$0 52Wk Low$11.03
Volume0 Avg Vol 10D1.6 Million

Ockham’s Rating

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NITE Revenue

Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company’s stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, NITE the high and low end of the Price to Sales per share ratios are 2.81x and 1.23x respectively.

Notice that NITE’s current Price to Sales per share ratio is 1.93x, which is somewhat below its historical weighted average by 5%. Given this level of sales per share, we suggest a neutral share price forecast. To the extent there is a further drop in the Price to Sales ratio from current levels, which would occur through some combination of increased sales per share or a decline in share price, we would only become more positive about the Price to Sales ratio outlook.

NITE Cash Earnings

Looking at NITE specifically in their Cash Earnings capabilities, Ockham views NITE as significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from NITE. For example, NITE’s Cash Earnings ratio per share has fluctuated between 10.40 and 24.57 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where NITE is with respect to prior business periods.

So with NITE’s current price (latest close of $19.68) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, NITE is 35% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn’t exist in a vacuum. So if the market doesn’t recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with NITE.

NITE Dividends

When determining a company’s future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn’t imperative for NITE to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis. NITE may pay a dividend at this time; however, there is an insufficient amount of history to incorporate it into our analysis. Therefore, we are not utilizing the dividends or lack thereof in our study. As NITE more consistent dividend history is made available, we will begin to factor this into the Ockham approach.

Peer Comparison


Knight Capital Group Inc. Industry Grouping

Company Ticker Market Cap (Ml) Latest
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not incuding NITE) 35.96 7.67 » 46.76 3.67 2.10 » 12.48 20.40% 24.75%
*10 year range does not include current year values
Waddell & Reed Financial, Inc. WDR $2.3 Billion $26.64 32.10 7.63 » 51.44 2.05 0.79 » 6.23 15.07% 30.54%
Morningstar, Inc. MORN $2.2 Billion $44.67 18.46 10.30 » 40.34 4.49 2.43 » 8.82 n/a 17.22%
Greenhill & Co Inc GHL $2.1 Billion $75.69 86.01 10.98 » 53.09 10.01 3.16 » 11.72 11.86% 46.46%
AllianceBernstein Holding LP AB $2.1 Billion $22.46 15.60 4.30 » 38.90 0.37 3.78 » 33.86 22.64% 18.66%
Knight Capital Group Inc. NITE $1.8 Billion $19.68 11.44 5.76 » 79.00 1.93 0.67 » 5.89 9.38% 13.28%
Stifel Financial Corp. SF $1.6 Billion $56.07 27.62 5.15 » 50.05 1.45 0.35 » 1.79 32.02% 10.86%

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The Latest Financial News
4:22:08 PM NITE $17.87 Knight Capital Group Inc.
20 days ago (08/10)
“…believe it (a ban on flash trading) would have an effect.” Direct Edge began life as Attain ECN, a struggling electronic platform that was sold to KNIGHT CAPITAL Group Inc. in 2005; after a rebranding, Goldman Sachs and Citadel Investment Group joined as stakeholders. The company’s adoption of flash orders – cribbed from a similar practice in options markets – helped Direct Edge gain a foothold in U.S. cash equities. O’Brien, a former Nasdaq …” – NITE on WSJ Marketbeat
5:34:01 AM NITE $19.27 Knight Capital Group Inc.
7/25/2009 5:34 AM
“…structure: Yes. Direct Edge is an independent broker-dealer owned by a consortium that includes the International Securities Exchange (“ISE"), KNIGHT CAPITAL Group, Inc., Citadel Derivatives Group, The Goldman Sachs Group, and J.P. Morgan. KNIGHT CAPITAL Group was originally the sole owner of Direct Edge and the firm was spun off in the third quarter of 2007 when Citadel and Goldman made investments. With a 31.54% stake, the ISE is currently the largest shareholder of Direct Edge, followed by Knight, Citadel, and Goldman, each with …” – NITE on Zero Hedge
7:18:11 AM NITE $17.78 Knight Capital Group Inc.
7/22/2009 7:18 AM
“…increase in loan loss provisions, which rose to $2.5B (3.53% of total loans) in Q2 vs. $1.4B (1.87% of total loans) in the year-ago period. (PR) KNIGHT CAPITAL Group (NITE): Q2 EPS of $0.52 beats by $0.12. Revenue of $314M (+65.4%) vs. $259M. (PR) Morgan Stanley (MS): Q2 EPS of -$1.37 misses by $0.88. Revenue of $5.4B (-11.3%) in-line. Shares -4.9% premarket (8:20 ET). (PR) Northern Trust (NTRS): Q2 EPS of $0.95 beats by $0.40. Revenue of $1B (-4.5%) in-line. …” – NITE on Seeking Alpha Wall St Breakfast
7:18:11 AM NITE $17.78 Knight Capital Group Inc.
7/22/2009 7:18 AM
“…10:30 EIA Petroleum Status Notable earnings before Wednesday’s open: AAI, APD, ATI, BA, BK, DAL, ENTG, GENZ, GNTX, HST, ITW, KEY, LLY, MO, MS, NITE, NTRS, PDS, PEP, PFE, SEIC, STI, STJ, SU, TCB, USB, USG, WFC, WHR Notable earnings after Wednesday’s close: ADS, BCR, CTXS, CVA, DOX, EBAY, EFX, EQIX, ETFC, FFIV, ISIL, ISRG, JAH, KNX, LHO, LOGI, MOS, NE, NFX, OMTR, OSIP, QCOM, RJF, RRC, SNDK, STLD, SWKS, TEX, TQNT, VMW, WLT Seeking Alpha …” – NITE on Seeking Alpha Wall St Breakfast
10:45:21 AM NITE $17.94 Knight Capital Group Inc.
6/4/2009 10:45 AM
“…Six months ago. Perception and people’s views on life can actually start helping out all by itself. I mean, if people feel better about things, things will get >> tom joyce, ceo of KNIGHT CAPITAL. Mark, over to you. >>> up next, as they say, as the revised cash or clunkers bill …” – NITE on Squawk On The Street
10:41:25 AM NITE $17.88 Knight Capital Group Inc.
6/4/2009 10:41 AM
“…Electronic trading platform has helped the firm stay a step ahead or above. Bob pisani now at the global exchange and electronic trading conference, with the ceo of KNIGHT CAPITAL in another cnbc exclusive. >> mark, you know the important thing is knight is a very important company. They sit between the market makers and the other people out …” – NITE on Squawk On The Street
10:37:22 AM NITE $17.79 Knight Capital Group Inc.
6/4/2009 10:37 AM
“…>> interesting. >>> coming up, bob pisaniby sanpisani joins us from the electronic trading conference with the ceo of KNIGHT CAPITAL on how his companies, automated operations and risk management, ideas have kept it above the fwra. >>> and revised clunker bill rolling into the senate. Mark, u.S. Auto industry still …” – NITE on Squawk On The Street
9:33:57 AM NITE $17.11 Knight Capital Group Inc.
5/21/2009 9:33 AM
“…Big slide to the downside here. Downgrade over at fbr, price target slashed from $8 to $13. Market perform to out perform. KNIGHT CAPITAL is on an upgrade and target of 21 to 20. Open table not quite open yet. Shares priced well above the let’s go to bertha at the nymex. >> thanks, scott. Renewed activity or intense …” – NITE on Squawk On The Street
9:30:32 AM NITE $16.20 Knight Capital Group Inc.
4/16/2009 9:30 AM
“…The bell is going to ring right here at the big board, rosetta stone celebrating their ipo, coe tom adams ringing the bell. At the nasdaq, KNIGHT CAPITAL group, jim smith, executive vp presiding over the opening bell >> our market reporters are let’s get straight to them. Bob, take it away. >> and the important thing here …” – NITE on Squawk On The Street
10:51:25 AM NITE $15.11 Knight Capital Group Inc.
4/3/2009 10:51 AM
“…Great buy. Another one I hate to recommend because they’re a competitor to the new york stock exchange, NITE. $15, this company 7.8 which is low with the group, but their earnings forecasts are looking pretty good. I think it’s a good shot for some appreciation in value >> you have some pals that work at NITE trading. We do. >> I love peter kenning. Great times. Let’s go back to charlie smith. Charlie, do you think this rally is for real? …” – NITE on Squawk On The Street
6:08:56 PM NITE $18.18 Knight Capital Group Inc.
2/13/2009 6:08 PM
“…Their numbers. Biotech, too. Acquisitions and big approvals from many of the majors. In january’s doing better. Credit suisse says things have last night you heard KNIGHT CAPITAL telling us things were improving and I know goldman sachs, nod terrible trust name, is doing better because credit, or at least bonds are being issued once again and traded as …” – NITE on Mad Money
6:25:09 PM NITE $18.93 Knight Capital Group Inc.
2/12/2009 6:25 PM
“…I own a million three-quarter i’m in it and i’m r. It’s diversifying the home team. >> well, t.J., everyone calls him t.J. In the business, thank you, tommy joyce KNIGHT CAPITAL. >> thanks for having me. Take care. >>> coming up, gains are few and far between in this market. …” – NITE on Mad Money
6:19:16 PM NITE $19.10 Knight Capital Group Inc.
2/12/2009 6:19 PM
“…Revenues in 2007 to 53%. Margins surging from 35 to 50%. Unless you’re in business, particularly the stock business, you have no idea how unbelievable this kind of turn NITE decided to sell some of the bad apple management businesses that deep haven capital management, I never liked this combination of hedge fund wilt in the company that lost 33% in now that NITE pulled the plug on the business, I think it makes the entire company a much less risky prospect and much easier to understand. The question is whether knight can continue the momentum. …” – NITE on Mad Money
6:18:36 PM NITE $19.18 Knight Capital Group Inc.
2/12/2009 6:18 PM
“…To use a word, it’s a jimmy carter word, may he rest in peace, to take market share. The combination the credit crunch has caused many of the brokerage firm that NITE competes with. They don’t have the money anymore or they’ve anyone out of business, that allowed NITE to be number one in terms of market share with the nasdaq and bulletin board stocks in the that’s unbelievable and I never thought this would happen. The company’s share of nyse and amex stocks increased from under % to 11% in 2008, reaching 15.2% last october. For the nasdaq-listed stocks, NITE’s market share increased from 11.9% to 16.5% in october. You have no idea how hard it is to get that kind of share and on NITE’s comps management said about 1% to 2% of the market is still up for grabs. NITE’s also been going through a major turnaround. The company’s made progress which were as high as 40% of its net trading revenues and remember, this is actually how you gauge one of these. …” – NITE on Mad Money
6:17:09 PM NITE $19.17 Knight Capital Group Inc.
2/12/2009 6:17 PM
“…>>> this kind offen viern am, the roughest ever separates the men from the boys in a company that takes share particularly in a down turn from the ones that KNIGHT CAPITAL group, NITE is the former kind of company. Get this, it is up 16.2% year on date. How many have you got like that in your portfolio versus the s&p …” – NITE on Mad Money
2:26:18 PM NITE $17.20 Knight Capital Group Inc.
1/22/2009 2:26 PM
“…Than any u.S. Exchange. There’s about 15% today, and over pretty much any time frame you look at where the agony has struck any other financial, they’re up. Here now is tom joyce, KNIGHT CAPITAL and chairman ceo. Night trading is a new name for a lot of people. Obviously they know peter kenny who was sitting in your seat there on this show, but can you just explain in a sentence, what …” – NITE on Street Signs
View All Knight Capital Group Inc. News

Key Fundamentals

NITE – Knight Capital Group Incorporated Fundamentals
Price (8/28 4:00PM) $19.68
Volume (8/28 4:00PM) 0
Last Close Price $19.68
10 Day Average Volume 1.6 Million
13 Week Price Range $16.09 – $20.78
52 Week Price Range $11.03 – $20.78
LTM Revenue $1.2 Billion
Shares Outstanding (12/2008) 93.6 Million
Market Capitalization $1.8 Billion
Shares Held By Institutions 80.8 Million
Institutional Holders 282
% Shares Held By Institutions 86.90%
Earnings Per Share (EPS) $1.94
P/E Ratio 11.20
Book Value Per Share $11.78
Gross Margin n/a%
Annual Dividend 0.00
Dividend Yield 0.00%
Beta 0.25
Fiscal Year Ends December

About Knight Capital Group Inc.

Knight Capital Group Incorporated is considered to operate in the Financial sector. They specifically operate in the Investmnt Brokerage-Regional business segment contained within the Financial Services industry.

The Company is a financial services firm which provides electronic and voice access to the capital markets across multiple asset classes for buy-side, sell-side and corporate clients, and asset management for institutions and private clients.