CME Group Inc. (CME): Today's Featured Financial Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

CME Group ( CME) pushed the Financial Services industry lower today making it today's featured Financial Services laggard. The industry as a whole was unchanged today. By the end of trading, CME Group fell 68 cents (-1.2%) to $57.72 on average volume. Throughout the day, 1.9 million shares of CME Group exchanged hands as compared to its average daily volume of two million shares. The stock ranged in price between $57.61-$58.78 after having opened the day at $58.64 as compared to the previous trading day's close of $58.40. Other companies within the Financial Services industry that declined today were: SP Bancorp ( SPBC), down 11.2%, Ampal-American Israel Corporation ( AMPL), down 9.7%, GFI Group ( GFIG), down 9.1%, and Ladenburg Thalman Financial Services ( LTS), down 6.8%.
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CME Group Inc. operates the CME, CBOT, NYMEX and COMEX futures exchanges worldwide. The company provides a range of products across various asset classes, such as interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather, and real estate. CME Group has a market cap of $19.53 billion and is part of the financial sector. The company has a P/E ratio of 12.4, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 19.8% year to date as of the close of trading on Tuesday. Currently there are nine analysts that rate CME Group a buy, two analysts rate it a sell, and four rate it a hold.

TheStreet Ratings rates CME Group as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the financial services industry could consider Financial Select Sector SPDR ( XLF) while those bearish on the financial services industry could consider Proshares Short Financials ( SEF).

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