Strong On High Relative Volume: CBOE Holdings (CBOE)

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 CBOE Holdings ( CBOE) as a strong on high relative volume 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 $32.2 million.
  • CBOE has traded 98,062 shares today.
  • CBOE is trading at 6.44 times the normal volume for the stock at this time of day.
  • CBOE is trading at a new high 3.02% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on CBOE:

CBOE Holdings, Inc., through its subsidiaries, operates markets for the trading of listed, or exchange-traded, derivatives contracts. The stock currently has a dividend yield of 1.6%. CBOE has a PE ratio of 24.9. Currently there are 3 analysts that rate CBOE Holdings a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for CBOE Holdings has been 758,700 shares per day over the past 30 days. CBOE has a market cap of $4.3 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.58 and a short float of 1.8% with 2.77 days to cover. Shares are down 1.7% year-to-date as of the close of trading on Friday.

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

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 largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • 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 3.37, 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.
  • Net operating cash flow has significantly increased by 52.66% to $32.92 million when compared to the same quarter last year. In addition, CBOE HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 0.71%.
  • CBOE HOLDINGS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CBOE HOLDINGS INC increased its bottom line by earning $1.99 versus $1.78 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $1.99).

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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