By Peet Serfontein & Hashmeel Suka
CBOE is one of the world's largest exchange holding companies, providing cutting-edge trade execution and clearing services to investors. The company offers trading solutions across a diverse range of products in multiple asset classes and geographies, including options, futures, US and European equities, exchange-traded products (ETPs), global foreign exchange (FX) and volatility products.
From a technical point of view, the stock presents a tactical speculative buying opportunity. This essentially means that the stock is currently trading at an attractive price level and is expected to see a significant increase going forward amid a positive catalyst, which in this case is strong earnings momentum.
The stock is currently trading in a "markup" phase. This is typically associated with improved investor sentiment and significant price increases amid a sustained uptrend, supportive of our bullish view.
The stock is trading above its 200-day simple moving average of ~$173.
Fading downside momentum, according to the MACD indicator as well as sharp upwards movement of the on-balance volume indicator, supports our bullish view.
Share Information
| Share Code | CBOE US |
|---|---|
| Industry | Financial Services |
| Market Capital (USD) | 19.2 billion |
| One Year Total Return | 33.23% |
| Return Year-to-Date | 2.61% |
| Current Price (USD) | 182.70 |
| 52 Week High (USD) | 199.00 |
| 52 Week Low (USD) | 130.92 |
| Financial Year End | December |
| The stock price has performed well over a one-year period, but performance has been subdued year-to-date. Various technical indicators suggest there is upside to come. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 7.80 | 8.58 | 9.15 | 9.75 |
| Growth (%) | 9.97 | 6.68 | 6.56 | |
| Dividend Per Share (USD) | 2.10 | 2.32 | 2.52 | 2.61 |
| Growth (%) | 10.43 | 8.50 | 3.62 | |
| Forward PE (times) | 20.76 | 19.47 | 18.74 | |
| Forward Dividend Yield (%) | 1.31 | 1.40 | 1.43 | |
| Earnings growth is expected to be robust this year due to healthy institutional trading activity. | ||||
Rationale:
Technical Analysis:
Long-term fundamental view:
| Share Name and position | AIZ - Early Stop Loss (Close the position) | PNW US - Buy (Continue to hold) | MO - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 179.29 | 73.02 | 43.54 |
| Current | 172.19 | 78.01 | 45.90 |
| Movement | -4.0% | 6.9% | 5.4% |
| Stock price technicals have deteriorated severely, prompting us to take an early stop loss. |
A developing symmetrical triangle remains of interest. The stock remains above its 200-day moving average. Upside price momentum is supportive.
Our profit target is $81, with a trailing stop-loss of $74.90. Exit the trade by 5 July 2024. |
The formation of a falling wedge pattern is attractive. The stock remains above its 200-day moving average. Upside price momentum is supportive.
Our profit target is $48, with a trailing stop-loss of $44.30. Exit the position around 19 July 2024. |
| Share Name and position | PEP - Buy (Continue to hold) | BLK - Buy (Continue to hold) | CRM - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 171.44 | 766.62 | 276.80 |
| Current | 180.31 | 805.19 | 287.07 |
| Movement | 5.2% | 5.0% | 3.7% |
|
A price above key support remains of interest. The stock remains above its 200-day moving which is encouraging. Upside momentum has halted which is a concern.
Our profit target is $190, with a trailing stop-loss of $175. Exit the trade by 26 June 2024. |
The formation of a symmetrical triangle pattern within an uptrend is attractive. The stock remains above its 200-day moving which is encouraging. Fading downside momentum is supportive.
Our profit target is $849, with a trailing stop-loss of $770.50. Exit the trade by 31 July 2024. |
Price action within an accumulation phase remains of interest. The stock remains above its 200-day moving which is encouraging. Fading downside momentum is supportive.
Our profit target is $311, with a trailing stop-loss of $272. Exit the trade by 20 August 2024. |
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