William R Shepard's Recent Buy: Acquires $303K In CME Gr Stock

A new SEC filing reveals that William R Shepard, Board Member at CME Gr CME, made a notable insider purchase on June 27,.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Shepard purchased 1,562 shares of CME Gr. The total transaction amounted to $303,670.

The latest update on Thursday morning shows CME Gr shares up by 0.22%, trading at $195.63.

All You Need to Know About 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.

Understanding the Numbers: CME Gr's Finances

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 3.21%. 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.

Holistic Profitability Examination:

• 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): CME Gr's EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 2.35.

Debt Management: CME Gr's debt-to-equity ratio is below the industry average. With a ratio of 0.13, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Market Valuation:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 22.23 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: The current P/S ratio of 12.48 is above industry norms, reflecting an elevated valuation for CME Gr's stock and potential overvaluation based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 15.62, CME Gr's EV/EBITDA ratio reflects a below-par valuation compared to industry averages signalling undervaluation

Market Capitalization: Exceeding industry standards, the company's market capitalization places it above industry average in size relative to peers. This emphasizes its significant scale and robust market position.

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Understanding the Significance of Insider Transactions

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Deciphering Transaction Codes in Insider Filings

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously outlined in Table I of the Form 4 filing. A P in Box 3 indicates 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.