CME Group Inc. (NasdaqGS:CME) Magic Formula Points to 5289

The MF Rank of CME Group Inc. (NasdaqGS:CME) is 5289. A company with a low rank is considered a good company to invest in. The Magic Formula …

The MF Rank (aka the Magic Formula) is a formula that pinpoints a valuable company trading at a good price. The formula is calculated by looking at companies that have a high earnings yield as well as a high return on invested capital. The MF Rank of CME Group Inc. (NasdaqGS:CME) is 5289. A company with a low rank is considered a good company to invest in. The Magic Formula was introduced in a book written by Joel Greenblatt, entitled, “The Little Book that Beats the Market”.

Stock market reversals can occur at any time. When these corrections happen, the investing world may be quick to make over the top predictions. Looking at the current health of the overall stock market, it is important to remember that market corrections can be quite normal in bull market runs. Investors may use a down day to buy some names they may have had their eye on. As we near the next earnings season, everyone will be checking to see how companies have performed over the previous quarter. Investors and analysts will both be eagerly watching to see if the company can meet and beet projections.

Investors seeking value in the stock market may be eyeing the Magic Formula Rank or MF Rank for CME Group Inc. (NasdaqGS:CME). Presently, the company has a MF Rank of 5289. The Magic Formula was devised and made popular by Joel Greenblatt in his book “The Little Book That Beats the Market”. Greenblatt’s formula helps find stocks that are priced attractively with a high earnings yield, or strong reported profits in comparison to the market value of the company. To spot opportunities in the market, investors may be searching for stocks that have the lowest combined MF Rank.

Currently, CME Group Inc. (NasdaqGS:CME)’s ROIC is0.479537. The ROIC 5 year average is 0.553416 and the ROIC Quality ratio is 12.236357. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a company is at turning capital into profits. ROIC may be a good measure to view when examining whether or not a company is able to invest wisely. ROIC may also be an important metric for the value investor who is trying to determine the company’s moat. CME Group Inc. (NasdaqGS:CME) has a current Value Composite Score of 53. Using a scale from 0 to 100, a lower score would represent an undervalued company and a higher score would indicate an expensive or overvalued company. This ranking was developed by James O’Shaughnessy using six different valuation ratios including price to book value, price to sales, EBITDA to EV, price to cash flow, price to earnings, and shareholder yield.

Stock analysis may be used to determine which shares the investor should buy, and at what price they should buy. Many investors will search for stocks that are currently undervalued. Fundamental research may involve scouring the balance sheet to spot a solid company. Many investors will use financial ratios to help determine which shares to purchase. Some of the more popular ratios are return on equity, earnings per share, price to earnings, and dividend yield. Applying the same type of research across the board may help the investor spot stocks that present a good opportunity for future growth.

Market watchers may also be following some quality ratios for CME Group Inc. (NasdaqGS:CME). Currently, the company has a Gross Margin (Marx) ratio of 1. This calculation is based on the research by University of Rochester professor Robert Novy-Marx. Marx believed that a high gross income ratio was a sign of a quality company. Looking further, CME Group Inc. has a Gross Margin score of 33. This score is based on the Gross Margin (Marx) metric using a scale from 1 to 100 where a 1 would be seen as positive, and a 100 would be viewed as negative.

The Price Index is a ratio that indicates the return of a share price over a past period. The price index of CME Group Inc. (NasdaqGS:CME) for last month was 1.01308. This is calculated by taking the current share price and dividing by the share price one month ago. If the ratio is greater than 1, then that means there has been an increase in price over the month. If the ratio is less than 1, then we can determine that there has been a decrease in price. Similarly, investors look up the share price over 12 month periods. The Price Index 12m for CME Group Inc. (NasdaqGS:CME) is 1.33069.

For many individual investors, deciding the proper time to sell a stock may be just as important as figuring out which stocks to buy at the outset. Investors may be reviewing the portfolio and looking at some stocks that have taken off and made a big run to the upside. When this occurs, investors may need to make the tough decision of whether to take some profits or hold out for further gains. Because every scenario is different, investors may want to dig a little deeper into the fundamentals before making a decision. If the stock’s fundamentals have weakened, it might be time to reassess the position.

Some of the best financial predictions are formed by using a variety of financial tools. The Price Range 52 Weeks is one of the tools that investors use to determine the lowest and highest price at which a stock has traded in the previous 52 weeks. The Price Range of CME Group Inc. (NasdaqGS:CME) over the past 52 weeks is 0.962. The 52-week range can be found in the stock’s quote summary.

The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength. The score helps determine if a company’s stock is valuable or not. The Piotroski F-Score of CME Group Inc. (NasdaqGS:CME) is 4. A score of nine indicates a high value stock, while a score of one indicates a low value stock. The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue. The score is also determined by change in gross margin and change in asset turnover.

The ERP5 Rank is an investment tool that analysts use to discover undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC. The ERP5 of CME Group Inc. is 5094. The lower the ERP5 rank, the more undervalued a company is thought to be.

Investors are constantly looking for ways to achieve success trading the stock market. Veteran investors may have spent many years trying to figure out the best way to build a winning stock portfolio. Unfortunately, there is no secret formula to beating the market. New investors may start trading with some preconceived notions about how to make money in stocks. Although there are some methods that might have worked in the past, nobody can guarantee future results based on past methods and performance. Investors may end up finding out the hard way that there is rarely any substitute for hard work and dedication, especially when picking stocks.

Sizing up the Valuation According to Quant for Cboe Global Markets, Inc. (BATS:CBOE) as ERP …

Cboe Global Markets, Inc. (BATS:CBOE) has an ERP5 rank of 3945. The ERP5 Rank is an investment tool that analysts use to discover undervalued …

Cboe Global Markets, Inc. (BATS:CBOE) has an ERP5 rank of 3945. The ERP5 Rank is an investment tool that analysts use to discover undervalued companies. The ERP5 looks at the Price to Book ratio, Earnings Yield, ROIC and 5 year average ROIC. The lower the ERP5 rank, the more undervalued a company is thought to be.

Many investors may strive to be in the stock market when the bulls are running and out of the market when the bears are in charge. Investors often use multiple strategies when setting up their portfolios. Some may rely solely on fundamental analysis, technical analysis, or a combination of both. Investing can be an extremely tough process. Individual investors often strive to gather and analyze vast amounts of information in order to make educated decisions. Often times, investors may have initial success in the stock market, and then things may turn sour. Confidence may be necessary to make the tougher decisions, but overconfidence may lead to an underperforming portfolio. Overconfidence may cause the investor to make poor decisions because they are relying too heavily on personal interpretations.

The Q.i. Value of Cboe Global Markets, Inc. (BATS:CBOE) is 42. The Q.i. Value is another helpful tool in determining if a company is undervalued or not. The Q.i. Value is calculated using the following ratios: EBITDA Yield, Earnings Yield, FCF Yield, and Liquidity. The lower the Q.i. value, the more undervalued the company is thought to be.

Technicals

The EBITDA Yield is a great way to determine a company’s profitability. This number is calculated by dividing a company’s earnings before interest, taxes, depreciation and amortization by the company’s enterprise value. Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The EBITDA Yield for Cboe Global Markets, Inc. (BATS:CBOE) is 0.064176.

The Earnings to Price yield of Cboe Global Markets, Inc. (BATS:CBOE) is 0.049131. This is calculated by taking the earnings per share and dividing it by the last closing share price. This is one of the most popular methods investors use to evaluate a company’s financial performance. Earnings Yield is calculated by taking the operating income or earnings before interest and taxes (EBIT) and dividing it by the Enterprise Value of the company. The Earnings Yield for Cboe Global Markets, Inc. (BATS:CBOE) is 0.048521. Earnings Yield helps investors measure the return on investment for a given company. Similarly, the Earnings Yield Five Year Average is the five year average operating income or EBIT divided by the current enterprise value. The Earnings Yield Five Year average for Cboe Global Markets, Inc. is 0.023273.

The FCF Yield 5yr Average is calculated by taking the five year average free cash flow of a company, and dividing it by the current enterprise value. Enterprise Value is calculated by taking the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents. The average FCF of a company is determined by looking at the cash generated by operations of the company. The Free Cash Flow Yield 5 Year Average of Cboe Global Markets, Inc. (BATS:CBOE) is 0.015713.

Ratios

The Current Ratio of Cboe Global Markets, Inc. (BATS:CBOE) is 0.91. The Current Ratio is used by investors to determine whether a company can pay short term and long term debts. The current ratio looks at all the liquid and non-liquid assets compared to the company’s total current liabilities. A high current ratio indicates that the company might have trouble managing their working capital. A low current ratio (when the current liabilities are higher than the current assets) indicates that the company may have trouble paying their short term obligations.

The Leverage Ratio of Cboe Global Markets, Inc. (BATS:CBOE) is 0.234779. Leverage ratio is the total debt of a company divided by total assets of the current and past year divided by two. Companies take on debt to finance their day to day operations. The leverage ratio can measure how much of a company’s capital comes from debt. With this ratio, investors can better estimate how well a company will be able to pay their long and short term financial obligations.

The price to book ratio or market to book ratio for Cboe Global Markets, Inc. (BATS:CBOE) currently stands at 3.48257. The ratio is calculated by dividing the stock price per share by the book value per share. This ratio is used to determine how the market values the equity. A ratio of under 1 typically indicates that the shares are undervalued. A ratio over 1 indicates that the market is willing to pay more for the shares. There are often many underlying factors that come into play with the Price to Book ratio so all additional metrics should be considered as well.

When dealing with the stock market, investors may seek to make trades that will limit regret and create a sense of pride. Often times, investors may be challenged with trying to figure out the proper time to sell winners or let go of losers. Of course, nobody wants to sell a winner if it looks like there may be more profits to be had. On the other hand, nobody wants to hold on to a loser for so long that severe losses pile up. Investors often need to assess their own appetite for risk. Some may be able to stomach large swings on a daily basis. Others may not be able to take the volatility when dealing with riskier investments. Risk decisions may be made on past outcomes, and investors who have experienced previous profits and gains may be more likely to take a bigger risk in the future. Those who have only seen substantial losses may be more risk adverse in the future.

Adding it All Up

The Piotroski F-Score is a scoring system between 1-9 that determines a firm’s financial strength. The score helps determine if a company’s stock is valuable or not. The Piotroski F-Score of Cboe Global Markets, Inc. (BATS:CBOE) is 4. A score of nine indicates a high value stock, while a score of one indicates a low value stock. The score is calculated by the return on assets (ROA), Cash flow return on assets (CFROA), change in return of assets, and quality of earnings. It is also calculated by a change in gearing or leverage, liquidity, and change in shares in issue. The score is also determined by change in gross margin and change in asset turnover.

The Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years. The score is a number between one and one hundred (1 being best and 100 being the worst). The Gross Margin Score of Cboe Global Markets, Inc. (BATS:CBOE) is 49. The more stable the company, the lower the score. If a company is less stable over the course of time, they will have a higher score.

When dealing with the stock market, investors may seek to make trades that will limit regret and create a sense of pride. Often times, investors may be challenged with trying to figure out the proper time to sell winners or let go of losers. Of course, nobody wants to sell a winner if it looks like there may be more profits to be had. On the other hand, nobody wants to hold on to a loser for so long that severe losses pile up. Investors often need to assess their own appetite for risk. Some may be able to stomach large swings on a daily basis. Others may not be able to take the volatility when dealing with riskier investments. Risk decisions may be made on past outcomes, and investors who have experienced previous profits and gains may be more likely to take a bigger risk in the future. Those who have only seen substantial losses may be more risk adverse in the future.

Communications Services Down As Investors Retreat From Growth Sectors — Communications …

SoftBank Group shares fell after reports the Japanese investment firm and telecom carrier made a multibillion dollar bet on U.S. tech giants, the latest …

Communications services companies fell as investors retreated from some of the most richly valued sectors.

For months, growth stocks, those that carry a relatively high valuation as measured by earnings, have outperformed value stocks, those with a relatively low price tag. That reversed itself in the last couple of days.

SoftBank Group shares fell after reports the Japanese investment firm and telecom carrier made a multibillion dollar bet on U.S. tech giants, the latest in Cinema chain AMC Entertainment Holdings is enticing risk-hungry stock investors to gamble on its recovery as the cinema chain continues its efforts to avoid bankruptcy, planning to raise about $180 million in equity, an unusual move for a distressed company whose bonds at roughly 40 cents on the dollar.

Write to Rob Curran at rob.curran@dowjones.com

Hedge Fund Collects $3 Billion In Bet On Wildfire Insurance Claims

Hedge fund Baupost Group found a way to turn California’s devastating wildfires into profits for investors. After betting on insurance claims against …
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Written by Dana Sanchez
Aug 25, 2020
wildfire insurance
Hedge fund Baupost Group found a way to profit from California’s wildfires, collecting $3 billion in its bet on wildfire insurance claims. A home burns as the Camp Fire rages through Paradise, Calif., Nov. 8, 2018. The fire forced the evacuation of an entire town. (AP Photo/Noah Berger)

Hedge fund Baupost Group found a way to turn California’s devastating wildfires into profits for investors.

After betting on insurance claims against Californian utility giant Pacific Gas and Electric (PG&E), Baupost received more than $3 billion in July, Bloomberg reported on Friday.

PG&E’s equipment has been linked to fires including the deadliest and most destructive wildfire in California history — the Camp Fire of 2018. The utility has agreed to a $13.5 billion settlement with victims of wildfires in the state.

Since Aug. 15, seven people have died in California wildfires, more than 100,000 have been displaced and 1.2 million acres have burned. The fires of 2017 and 2018 claimed more than 100 lives.

Billionaire investor and author Seth “The Oracle of Boston” Klarman manages the Baupost Group hedge fund. Founded in 1982 with initial capital of $27 million, Baupost is now one of the largest hedge funds in the world. Klarman wrote the book “Margin of Safety” published in 1991.

The payout was Baupost’s biggest profit generator in July and represented a large markup from what the firm had anticipated, the fund told investors Thursday. The fund bought $6.8 billion of subrogation claims against PG&E, court documents show, according to Bloomberg.

Insurers sell subrogation claims to investors at a discount because they know they’ll get paid right away. In the process, insurers lose the right to sue to recuperate damages endured by policyholders.

During the second-quarter coronavirus lockdowns, Klarman was reducing his exposure after the stock market bottomed out on March 23.

“The coronavirus pandemic caught several old school value investors like Warren Buffett, Stan Druckenmiller, and Klarman flat-footed,” Insider Monkey reported. “Their brains couldn’t function in a market environment where high growth tech stocks are flourishing and value stocks languishing as the Federal Reserve (invented) new ways of manipulating the equity and bond markets.”

As a result, in the second quarter, Klarman completely sold out of Cheniere Energy (LNG), Energy Transfer Equity (ET), XPO Logistics (XPO), Spirit Aerosystems (SPR), and Cars.com (CARS).

Baupost acquired some of the PG&E claims at about 35 cents on the dollar, Bloomberg reported, so its profit on the trade could have been close to $1 billion. But the gains were partly offset by losses on the firm’s equity holdings in the utility company, a source said.

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PG&E went into bankruptcy in January 2019 facing massive liabilities from fires blamed on its equipment that burned Northern California in 2017 and 2018.

The utility, insurers and claims holders including Baupost reached a deal in September 2019 that would bring the investors $11 billion in cash, as approved by a federal judge. A spokesman for fire victims said at the time that the arrangement was a blatant move by the utility and insurers “to help wealthy hedge funds and Wall Street.”

Fire victims across California and other parts of the U.S. continue to suffer the impacts of increasingly destructive wildfires, yet hedge funds profit from these calamities, critics say.

It’s a case of Wall Street firms perfecting their lucrative approach to disaster management, Common Dreams reported.

“What stage of capitalism is this?” Journalist David Sirota tweeted.

The stage where the accumulation of wealth at all costs becomes a mental illness. We have to face the fact that fantastic wealth is acting like a disease. When people have more money than some countries, it warps their perception of ethics & what is right & wrong.

— Urban_Tribesman Is Sinister #NHS☠️ (@Changeling_1) August 24, 2020

Baupost bought PG&E subrogation claims from people wanting to get rid of them at $0.35 on the dollar. What’s wrong with providing a market for things other people are wanting to sell? seems like it was a good bet.Subrogation is a normal part of insurance. How’s it not capitalism?

— Premature Accumulation Murder Hornet MicroScalper (@MoMoBagholder) August 25, 2020

Read more: Hedge Fund Manager And Biden Advisor Is Shorting Uber On Coming Regulatory Pressures