January 4, 2024
Top 10 Stock CME Group Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: CME Group – Top 10 Stock in Dow Jones U.S. Investment Services Index
CME Group is listed as a top 10 stock on January 04, 2024 in the market index D.J. US Investing because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for CME Group on January 04, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Financial Exchanges & Data |
| Index | NASDAQ, D.J. US Investing, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View CME Group Strong Buy
| 360 METRICS | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 18 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 75 |
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| 360° VIEW | ||||||||
| 360° VIEW | 76 |
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ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock CME Group are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for CME Group. The consolidated Growth Rank has a good rank of 55, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 55% of competitors in the same industry. The consolidated Safety Rank at 100 means that the company has a financing structure that is safer than 100% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 75, which means that professional investors are more optimistic about the stock than for 75% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 18, meaning that the share price of CME Group is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 82% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, CME Group is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 55), a safe financing structure (Safety Rank of 100), and positive professional market sentiment (Sentiment Rank of 75), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of CME Group compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (55% better than peers). The value rank could be the reverse reflection of that (45%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for CME Group very positive
ANALYSIS: With an Obermatt Sentiment Rank of 75 (better than 75% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock CME Group is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for CME Group. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 78, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in CME Group. Finally, the Professional Investors rank is 87, which means that currently, professional investors hold more stock in this company than in 87% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 75 (more positive than 75% compared with investment alternatives), CME Group has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 41, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 59% of competitors). This could mean future risks and should make investors careful. Attention to negative news for CME Group is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: CME Group Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 18 (worse than 82% compared with alternatives), CME Group shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for CME Group. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 52% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning CME Group's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 18 which means that the stock price compared with what market professionals expect for future profit levels is higher than 82% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 46 is also low. Compared with invested capital, the stock price is higher than for 54% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 18, is a sell recommendation based on CME Group's stock price compared with the company's operational size and dividend yields. Should dividend investors pick CME Group? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose CME Group only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: CME Group Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), CME Group shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for CME Group. Profit Growth has a rank of 72 which means that currently professionals expect the company to grow its profits more than 72% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 56, and Stock Returns has a rank of 65 which means that the stock returns have recently been above 65% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 32 (68% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: CME Group Debt Financing Safety very solid
| SAFETY METRICS | January 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 77 |
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| REFINANCING | ||||||||
| REFINANCING | 81 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2023, the company CME Group has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of CME Group is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for CME Group. Leverage is at 77, meaning the company has a below-average debt-to-equity ratio. It has less debt than 77% of its competitors. Refinancing is at a rank of 81, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. Finally, Liquidity is also good at a rank of 90, which means that the company generates more profit to service its debt than 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), CME Group has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: CME Group Above-Average Financial Performance
| COMBINED PERFORMANCE | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 18 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 73 |
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ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), CME Group (Financial Exchanges & Data, USA) shares have above-average financial characteristics compared with similar stocks. Shares of CME Group are low in value (priced high) with a consolidated Value Rank of 18 (worse than 82% of alternatives). But they show above-average growth (Growth Rank of 55) and are safely financed (Safety Rank of 100, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on CME Group's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company CME Group exhibits low value (Obermatt Value Rank of 18), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 55). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 100) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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