Bulls Still Betting on ICE

Don't expect IntercontinentalExchange(ICE Quote) to cool its heels for long.

Shares of the Atlanta-based futures and commodities exchange have tripled over the last year, as the company has ridden the strong growth of financial markets and a global exchange merger wave. But the stock has fallen 15% from its high in February, as questions have emerged about ICE's place in the quickly consolidating industry.

ICE first tried being an acquirer, with March's $9.9 billion unsolicited bid for the Chicago Board of Trade(BOT Quote). The company appears to have been frozen out of that deal when Chicago Mercantile Exchange(CME Quote) raised its bid for the CBOT earlier this month.

Yet some observers believe it's just as well that the ICE is likely to lose out on the CBOT. They see strong growth opportunities ahead for the exchange -- not to mention its possible appeal as a buyout candidate.

"This exercise was to engender goodwill in the industry," Jamie Selway, a managing director at White Cap Trading in New York, says of the ICE bid for the CBOT. He sees ICE using those gains to compete better with the CME by launching products such as financial futures.

"It's a really attractive company," Selway says.

He's far from the only one to feel that way.

Indeed, several hedge fund managers, including D.E. Shaw and Chilton Investments, have bought up positions in ICE this year. They may well be betting on a potential takeout.