Today's Post-Market Laggard: CME Group (CME)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified CME Group ( CME) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified CME Group as such a stock due to the following factors:

  • CME has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $136.8 million.
  • CME is down 3.3% today from today's close.

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More details on CME:

CME Group Inc., through its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. The stock currently has a dividend yield of 2.5%. CME has a PE ratio of 26.0. Currently there are 7 analysts that rate CME Group a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for CME Group has been 2.0 million shares per day over the past 30 days. CME Group has a market cap of $26.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.05 and a short float of 1.8% with 2.67 days to cover. Shares are down 1.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CME Group as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, reasonable valuation levels and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CME GROUP INC has improved earnings per share by 16.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, CME GROUP INC increased its bottom line by earning $2.93 versus $2.70 in the prior year. This year, the market expects an improvement in earnings ($3.61 versus $2.93).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for CME GROUP INC is rather high; currently it is at 60.77%. Regardless of CME's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CME's net profit margin of 27.70% significantly outperformed against the industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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