At the end of last quarter, 64 hedge funds entered this exchange stock—the highest number ever. That has pushed the shares up; you may want to wait for a brief pullback before buying.
CME Group Inc. (CME)
From Positive Patterns
CME Inc. has operating margins of 55% and net profit margin of 52%. Of every $2 CME takes in, $1 is a profit. I call that a good business. As global markets expand, so too does CME volume. Imagine owning an exclusive casino—not in Vegas or Atlantic City—rather, an exclusive (mostly electronic) casino that reaches all over the globe! The players have to put up big-time cash to ‘play’ in the casino and then cha-ching: Every time they do a trade CME gets a small piece of every transaction (like Visa). Billions are ventured every day—and just like the toll-booth, every ticket that is punched includes a small piece for CME.
So, I do think that right now CME is in a very good spot, and the stock should go higher. I also look for regular dividend raises in the future from CME. At $225 and below, I think it’s a good long-term buy/keep, but also think it should do very well in the next two years.
Bob Howard, Positive Patterns, P.O. Box 310, Turners, MO 65765, 417-887-4486, December 1, 2021