CME Group, Inc. (CME)

Excellent management.

Normally a 14% gain in three months would be considered "pretty good", but since the S&P has gained 18% since my call, I'm still in the RED from a CAPS perspective. CME Group is a FUTURES exchange. The high volitility and somewhat educated "retail investor" have added to the volume of future contracts traded. P/E of CME still seems a little "rich", but book value is a LOW 1.09 with profit margins of 24% and operating margins of 64%! With 10% QTR/QTR growth. CME Group has some high debt at $3 Billion, but operating and levered FCF is over $1 Billion. CME group is still less than half it's Dec. 2007 high, toss in a 1.5% dividend and you have some decent potential energy building in CME. At $300 per share from a pure dollar play, it isn't cheap, but it's not the $3,300 BRK-B either and has comparable states to a Google at $554 share! None of the three should have to worry about meeting minimum listing requirments! There is a rumor that CME is considering buying the Chicago CBOE for $5Billion. This seem speculative, if nor early, since the CBOE is under restructuring.

Cyclical action in an uncertain market in an adverse environment.

fool

This company has gotten beaten up in the recent months. Their stream of revenues from CDS swap trading and all their other instruments that they trade will make it a lot of money. Should be trading at 400 by year end

target-370

Volatility will come back

Commodities and futures index.

Extra business from increased market regulation

#32 Best Corporate Citizen
http://www.business-ethics.com/node/75

With more and more revenues coming in from all the CDS Swaps this company should easily see 400 in the next few months

Recent news regarding derivatives pushes this higher.

CME is a major player in the derivatives and hedging market. They make the market, back the market, and take a cut on both sides. Nice. ICE is nice, CME is better.

CME got taken down with the rest of the market, perhaps more than it deserved. It has come back and this was a better call one month ago, but it is technically setting up for another leg.

Their trading volumes are comparatively down, but, if there is trading, CME makes money. Fixed costs and overhead are very low. You just encourage volume with more and better products. When the CDS market gets going and the economy swings back to expansion, CME is going to 500.

People gotta trade somewhere

commodities and financials under stress

CME appears to be bottoming from a technical point of view. CME is key to risk management and earnings are still expected to grow over the next 2 years.

POST BY RBBARN7EXCITECOM
MY BEST PICK

p/book 0.68. Any company that earns 60% operating margin, and a 50% higher net profit margin compared to industry peers that is trading at 68% of book value is a good buy in my opinion. Risk: steep decline in trading volume due to declining hedge fund industry, banks paring back trading operations, and a drop in derivatives volume but it’s still one of the largest exchanges worldwide. Carbon and energy trading should pick up as well as interest rate derivatives given the size of the bail out package and its implications on inflation rates going forward.

Cheap, solid way to play an economic and/or commodity rebound.