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CME Group's Fundamental and Inorganic Growth Impress

We issued an updated research report on CME Group Inc.CME on Sep 9, 2015.

CME Group's fundamental growth strongly supports its improving operating leverage. Moreover, it boosts the company's leading position of about 90% market share of the global futures trading and clearing services. In addition to the expansion of futures products in emerging markets, non transaction-related opportunities and OTC offerings should continue to contribute modestly to the top-line growth going forward.

Most of CME Group's long-term growth investments made in the past are showing desirable upsides. The company's NYMEX products and CME ClearPort services continue to grow. Also, the launch of CME Clearing Europe in May 2011 has accentuated global benchmark products and multi-asset class OTC clearing services with a consistent focus on the emerging markets of Europe.

With the acquisition of KCBT, CME Group has further strengthened its position over all the wheat futures in the U.S. The GreenX acquisition marks a step toward achieving a new scale in the energy market products as the company continues to execute its global growth strategy in the emerging markets of Europe, Asia and Latin America.

Although, low rate per contract, intense competition, regulatory compliances, interest rate volatility and pricing pressure pose risks for CME Group, modest capital position, diverse derivative product line, lower expense guidance and accelerated dividends raise optimism. Moreover, efforts to promote, expand and cross-sell its core exchange-traded business through strategic alliances, meaningful acquisitions, new product initiatives and global presence support the company's growth.

Zacks Rank and Key Picks from the Sector

CME Group presently carries a Zacks Rank #2 (Buy). Some other stocks in the finance sector worth considering are American Capital, Ltd. ACAS , Atlantic Coast Financial Corporation ACFC and CBOE Holdings, Inc. CBOE . While American Capital and Atlantic Coast Financial both carry a Zacks Rank #1 (Strong Buy), CBOE Holdings carries the same Zacks Rank as CME Group.

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CME GROUP INC (CME): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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