The firm said it initiated coverage on the company, which offers a variety of global products across all asset classes, as it believes CME Group is leveraged to higher trading volume, especially in futures.
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Separately, TheStreet Ratings team rates CME GROUP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CME GROUP INC (CME) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for CME GROUP INC is rather high; currently it is at 65.81%. 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 35.32% significantly outperformed against the industry.
- Although CME's debt-to-equity ratio of 0.10 is very low, it is currently higher than that of the industry average. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.07 is very weak and demonstrates a lack of ability to pay short-term obligations.
- CME GROUP INC's earnings per share declined by 15.1% in the most recent quarter compared to the same quarter a year ago. 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, 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 ($3.18 versus $2.93).
- CME, with its decline in revenue, underperformed when compared the industry average of 11.3%. Since the same quarter one year prior, revenues slightly dropped by 10.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: CME Ratings Report
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