CME - Embedded Expectations Analysis - 2021 02 08
CME Group Inc. (CME:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 40.7x Uniform P/E. At these levels, markets have bullish expectations for the firm, and management is confident about the potential of QDM 2.0, securing sales opportunities from the BrokerTec-Globex integration, and the potential of VOLQ FuturesSpecifically, management is confident VOLQ futures will help clients mitigate efficiencies from their other equity products and that they are converting more of their cross introductions from the BrokerTec-Globex integration into sales opportunities. They are also confident the micro E-mini futures average rate per contract (RPC) increased to $0.132 in Q3 and that WTI crude will be trading in a $4 range going forward. Furthermore, they are confident quote-driven markets (QDM) 2.0 will make EBS Direct a state-off-the-art and efficient trading platform
CME Group is a holding company. Through its subsidiaries, the company exchanges provides a range of global benchmark products across asset classes based on interest rates, equity indexes, foreign exchange (FX), agricultural, energy and metal commodities. The company provides futures and options on futures trading across asset classes through its subsidiary, Chicago Mercantile Exchange Inc. (CME) Globex platform, cash and repo fixed income trading via BrokerTec, and cash and OTC FX trading via EBS. In addition, the company operates central counterparty clearing providers, CME Clearing, a division of CME. The company also provides optimization, reconciliation and processing services through TriOptima, Traiana and Reset.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.