CME Group Receives Attractive Rating For October
CME Group, Inc is the world’s largest financial derivatives exchange – and yet, you’ve likely never heard of it. This Chicago-based company is a major trading player in global commodities, energy, interest rates, and foreign exchanges, among other derivatives.
CME Group hasn’t had a stellar year – in fact, they’ve underperformed the S&P 500 since the start. After losing over $75 in March, the company struggled to recover, before sliding down a long, slow slope.
However, this month’s luck looks about to change. While CME has continued to see sliding stock prices throughout September and into October, these losses have been made up almost as quickly as they occurred.
Though the market can’t seem to make up its mind whether CME Group should rise or fall this time, the company appears to be in overall good shape, and prospects are high.
Revenue has seen continual growth in recent years, with 5% over the last fiscal year and over 40% in the last three. This brings CME’s revenue from $3.64 billion to nearly $4.86 billion.
The company’s operating income has seen its share of gains, as well. CME’s operating income grew from $2.3 billion three years ago to $2.66 billion in the last fiscal year – an increase of over 27%. Over a third of that growth – 10.1% – occurred in the last fiscal year alone.
Solid increases in income aren’t all that CME Group has going for it. Currently, CME’s interest rate volumes contribute 30% of the company’s revenue. As interest rate volatility returns in the next few months, it’s likely that their volumes will substantially increase, as the business model is well-suited for pickup in areas such as interest rates and inflation.
What does this mean for the average investor?
That’s what Q.ai’s deep learning AI (artificial intelligence) is here to tell you. We provide an in-depth look at a company’s financials and fundamentals to give you an accurate picture of a company’s investment-worthiness.
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CME Group, Inc (CME) by the Numbers
CME Group closed down 0.92% on Monday, ending the day at $166.94 to the tune of 1.43 million shares. This price comes in the middle of a month long wave of minor ups and down, as evidenced by its middling position between the 10-day price average of $166.77 and the 22-day price average of $167.30.
Currently, the stock is still down over 16% for the year.
The company’s recent financials show that CME’s EPS has grown by over 12% in the last year, bringing per-share earnings to $5.91. (Though this pales in comparison to their $11.94 EPS three years ago).
The company’s ROE has taken a hit in recent years as well, falling from 19% three years ago to 8% in the last fiscal year.
These recent losses in EPS and ROE have a silver lining, however: currently, CME is trading with a Forward 12M P/E of 25.54.
So, What’s the Verdict?
CME Group is one of the biggest financial companies that you’ve never heard of. As a result, although their stock and EPS have taken a hit in the last year, the company is still able to position itself to capitalize on the first mention of inflation or interest rate increase in the coming months.
Taking these factors into account, our AI has rated CME Group, Inc above average overall, with an A in Technical, B’s in Momentum Volatility and Quality Value, and a C in Growth.
Thus, CME Group, Inc is rated Attractive for the month of October.
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