Benzinga - by Benzinga Insights, Benzinga Staff Writer.
A substantial insider sell was reported on May 1, by Terrence A Duffy, Chairman and CEO at CME Gr (NASDAQ:CME), based on the recent SEC filing.
What Happened: Duffy opted to sell 40,000 shares of CME Gr, according to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The transaction's total worth stands at $8,436,496.
As of Thursday morning, CME Gr shares are down by 0.36%, currently priced at $207.33.
Unveiling the Story Behind CME Gr Based in Chicago, CME Group operates exchanges giving investors, suppliers, and businesses the ability to trade futures and derivatives based on interest rates, equity indexes, foreign currencies, energy, metals, and commodities. The CME was founded in 1898 and in 2002 completed its initial public offering. Since then, CME Group has consolidated parts of the industry by merging with crosstown rival, CBOT Holdings in 2007 before acquiring Nymex Holdings in 2008 and NEX in 2018. In addition, the company has a 27% stake in S&P Dow Jones Indices, making the Chicago Mercantile Exchange the exclusive venue to trade and clear S&P futures contracts. Through CME's acquisition of NEX in 2018, it has also expanded into cash foreign exchange, fixed income trading, and collateral optimization.
Breaking Down CME Gr's Financial Performance Revenue Growth: CME Gr displayed positive results in 3 months. As of 31 March, 2024, the company achieved a solid revenue growth rate of approximately 3.38%. This indicates a notable increase in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.
Profitability Metrics:
- Gross Margin: The company maintains a high gross margin of 86.16%, indicating strong cost management and profitability compared to its peers.
- Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 2.35, CME Gr showcases strong earnings per share.
Financial Valuation:
- Price to Earnings (P/E) Ratio: The current P/E ratio of 23.69 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.
- Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 13.3 suggests overvaluation in the eyes of investors, considering sales performance.
- EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a below-average EV/EBITDA ratio of 16.62, CME Gr presents an opportunity for value investors. This lower valuation may attract investors seeking undervalued opportunities.
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Why Insider Activity Matters in Finance Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.
Exploring the legal landscape, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.
Highlighted by a company insider's new purchase, there's a positive anticipation for the stock to rise.
But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Transaction Codes To Focus On For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of CME Gr's Insider Trades.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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