Yahoo Finance Is CME Group (CME) Far From an Average Business?
Cooper Investors, an investment management firm, released its “Cooper Investors Global Equities Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 7.4% in the first quarter, compared to a 9.4% return for the benchmark MSCI ACWI. The market rally, which started in late October 2023, has lasted through 2024. The US is leading, with the S&P 500 reaching new all-time highs for the first time since the rate-hiking cycle started, driven by the continuous rise in tech companies connected to AI markets. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Cooper Investors Global Equities Fund featured stocks like CME Group Inc. (NASDAQ:CME) in the first quarter 2024 investor letter. Headquartered in Chicago, Illinois, CME Group Inc. (NASDAQ:CME) operates contract markets for the trading of futures and options on futures contracts. On April 22, 2024, CME Group Inc. (NASDAQ:CME) stock closed at $215.48 per share. One-month return of CME Group Inc. (NASDAQ:CME) was 1.22%, and its shares gained 14.75% of their value over the last 52 weeks. CME Group Inc. (NASDAQ:CME) has a market capitalization of $77.579 billion.
Cooper Investors Global Equities Fund stated the following regarding CME Group Inc. (NASDAQ:CME) in its first quarter 2024 investor letter:
"A company that welcomes uncertainty is CME Group Inc. (NASDAQ:CME), a Stalwart in which we recently reinitiated a position, having successfully invested historically. Value latency has re-emerged with the shares materially underperforming over the last five years.
As the largest derivatives exchange globally, CME offers leading liquidity pools to risk managers across multiple asset classes including equities, interest rates, FX, energy and agricultural commodities. The management culture at CME exemplifies the pragmatic, no-nonsense Midwest attitude that we admire of Chicagoans - no coincidence that the portfolio owns five Chicago-based companies today. This was reinforced in a recent meeting with newly appointed CFO Lynne Fitzpatrick. CME know what they are and what they’re not, with a solid track record throughout market fads and blow-ups. The story of CEO Terry Duffy calling out Sam Bankman-Fried as ‘an absolute fraud’ (at the time he was lauded across the land as a visionary genius) is one recent example of their nose for risk.
We see several avenues for CME to grow earnings and cash flows today, irrespective of market volatility, as well as continuing to pay a special dividend implying a yield of ~4-5%. The business rarely changes hands as cheaply as it does today, trading at an average market multiple versus typically trading at a 30-60% premium. With this business routinely generating over 50% returns on invested capital and carrying no debt today, CME is far from an average business."
A businessman in the foreground shaking hands with a colleague in a trading floor.
CME Group Inc. (NASDAQ:CME) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, CME Group Inc. (NASDAQ:CME) was held by 55 hedge fund portfolios, compared to 53 in the previous quarter, according to our database.
We previously discussed CME Group Inc. (NASDAQ:CME) in another article, where we shared the list of stocks insiders are dumping. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
Disclosure: None. This article is originally published at Insider Monkey.
