CBOE Holdings (CBOE) Is Today's Water-Logged And Getting Wetter Stock - TheStreet

Trade-Ideas LLC identified

CBOE Holdings

(

CBOE

) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified CBOE Holdings as such a stock due to the following factors:

  • CBOE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.4 million.
  • CBOE has traded 526,929 shares today.
  • CBOE traded in a range 200.6% of the normal price range with a price range of $2.25.
  • CBOE traded below its daily resistance level (quality: 6 days, meaning that the stock is crossing a resistance level set by the last 6 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

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More details on CBOE:

CBOE Holdings, Inc., through its subsidiaries, operates as an options exchange and creator of listed options in the United States. The stock currently has a dividend yield of 1.3%. CBOE has a PE ratio of 31. Currently there are 2 analysts that rate CBOE Holdings a buy, no analysts rate it a sell, and 8 rate it a hold.

The average volume for CBOE Holdings has been 602,500 shares per day over the past 30 days. CBOE has a market cap of $5.6 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.53 and a short float of 3.8% with 5.25 days to cover. Shares are up 9.1% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CBOE Holdings as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • CBOE's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 3.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CBOE has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.54, which clearly demonstrates the ability to cover short-term cash needs.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Financial Services industry and the overall market, CBOE HOLDINGS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for CBOE HOLDINGS INC is rather high; currently it is at 56.91%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 30.15% significantly outperformed against the industry average.

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