Intrinsic value of CME Group Cl A - CME

Previous Close

$161.78

  Intrinsic Value

$133.44

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  Rating & Target

hold

-18%

Previous close

$161.78

 
Intrinsic value

$133.44

 
Up/down potential

-18%

 
Rating

hold

Our model is not good at valuating stocks of financial companies, such as CME.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CME stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of CME Group Cl A (CME) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.06
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
Revenue, $m
  3,595
  3,804
  4,021
  4,248
  4,485
  4,733
  4,992
  5,263
  5,546
  5,843
  6,153
  6,478
  6,818
  7,174
  7,548
  7,939
  8,349
  8,779
  9,229
  9,702
  10,197
  10,717
  11,262
  11,834
  12,434
  13,064
  13,725
  14,418
  15,146
  15,909
  16,711
Variable operating expenses, $m
 
  736
  735
  733
  732
  731
  729
  728
  726
  725
  723
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -54
  -57
  -59
  -62
  -66
  -69
  -72
  -76
  -80
  -84
  -88
  -93
Fixed operating expenses, $m
 
  688
  705
  723
  741
  759
  778
  798
  818
  838
  859
  880
  902
  925
  948
  972
  996
  1,021
  1,047
  1,073
  1,100
  1,127
  1,155
  1,184
  1,214
  1,244
  1,275
  1,307
  1,340
  1,373
  1,407
Total operating expenses, $m
  1,393
  1,424
  1,440
  1,456
  1,473
  1,490
  1,507
  1,526
  1,544
  1,563
  1,582
  844
  864
  885
  906
  928
  950
  972
  996
  1,019
  1,043
  1,068
  1,093
  1,118
  1,145
  1,172
  1,199
  1,227
  1,256
  1,285
  1,314
Operating income, $m
  2,203
  2,380
  2,581
  2,792
  3,013
  3,243
  3,485
  3,738
  4,003
  4,280
  4,571
  5,633
  5,953
  6,289
  6,641
  7,011
  7,399
  7,806
  8,234
  8,683
  9,154
  9,650
  10,170
  10,716
  11,290
  11,893
  12,526
  13,191
  13,890
  14,624
  15,396
EBITDA, $m
  2,428
  3,846
  4,089
  4,342
  4,606
  4,883
  5,173
  5,476
  5,794
  6,127
  6,476
  6,842
  7,225
  7,628
  8,049
  8,492
  8,957
  9,444
  9,956
  10,493
  11,057
  11,649
  12,271
  12,924
  13,610
  14,330
  15,086
  15,881
  16,716
  17,593
  18,514
Interest expense (income), $m
  85
  85
  204
  318
  436
  560
  689
  824
  965
  1,113
  1,267
  1,429
  1,598
  1,776
  1,961
  2,156
  2,360
  2,573
  2,797
  3,032
  3,279
  3,537
  3,808
  4,092
  4,390
  4,703
  5,031
  5,376
  5,737
  6,116
  6,514
Earnings before tax, $m
  2,288
  2,295
  2,377
  2,475
  2,577
  2,684
  2,796
  2,914
  3,038
  3,168
  3,304
  4,204
  4,355
  4,513
  4,680
  4,855
  5,039
  5,233
  5,436
  5,650
  5,876
  6,112
  6,362
  6,624
  6,899
  7,189
  7,494
  7,815
  8,153
  8,508
  8,882
Tax expense, $m
  754
  620
  642
  668
  696
  725
  755
  787
  820
  855
  892
  1,135
  1,176
  1,219
  1,264
  1,311
  1,361
  1,413
  1,468
  1,526
  1,586
  1,650
  1,718
  1,788
  1,863
  1,941
  2,024
  2,110
  2,201
  2,297
  2,398
Net income, $m
  1,534
  1,675
  1,735
  1,806
  1,881
  1,959
  2,041
  2,127
  2,217
  2,312
  2,412
  3,069
  3,179
  3,295
  3,416
  3,544
  3,679
  3,820
  3,969
  4,125
  4,289
  4,462
  4,644
  4,835
  5,037
  5,248
  5,471
  5,705
  5,952
  6,211
  6,484

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,952
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  69,369
  71,764
  75,869
  80,154
  84,630
  89,305
  94,192
  99,302
  104,648
  110,240
  116,094
  122,222
  128,640
  135,363
  142,407
  149,787
  157,524
  165,633
  174,136
  183,052
  192,402
  202,209
  212,497
  223,289
  234,612
  246,492
  258,958
  272,040
  285,769
  300,177
  315,299
Adjusted assets (=assets-cash), $m
  67,417
  71,764
  75,869
  80,154
  84,630
  89,305
  94,192
  99,302
  104,648
  110,240
  116,094
  122,222
  128,640
  135,363
  142,407
  149,787
  157,524
  165,633
  174,136
  183,052
  192,402
  202,209
  212,497
  223,289
  234,612
  246,492
  258,958
  272,040
  285,769
  300,177
  315,299
Revenue / Adjusted assets
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
Average production assets, $m
  20,123
  21,288
  22,506
  23,777
  25,105
  26,492
  27,941
  29,457
  31,043
  32,702
  34,438
  36,256
  38,160
  40,154
  42,244
  44,433
  46,728
  49,134
  51,656
  54,301
  57,074
  59,984
  63,035
  66,237
  69,596
  73,120
  76,818
  80,698
  84,771
  89,045
  93,531
Working capital, $m
  1,086
  -917
  -969
  -1,024
  -1,081
  -1,141
  -1,203
  -1,268
  -1,337
  -1,408
  -1,483
  -1,561
  -1,643
  -1,729
  -1,819
  -1,913
  -2,012
  -2,116
  -2,224
  -2,338
  -2,458
  -2,583
  -2,714
  -2,852
  -2,997
  -3,148
  -3,308
  -3,475
  -3,650
  -3,834
  -4,027
Total debt, $m
  2,231
  5,376
  8,360
  11,475
  14,729
  18,128
  21,681
  25,396
  29,282
  33,348
  37,603
  42,059
  46,725
  51,612
  56,733
  62,099
  67,723
  73,618
  79,800
  86,282
  93,079
  100,209
  107,688
  115,534
  123,766
  132,403
  141,466
  150,976
  160,957
  171,432
  182,425
Total liabilities, $m
  49,029
  52,173
  55,157
  58,272
  61,526
  64,925
  68,478
  72,193
  76,079
  80,145
  84,400
  88,856
  93,522
  98,409
  103,530
  108,896
  114,520
  120,415
  126,597
  133,079
  139,876
  147,006
  154,485
  162,331
  170,563
  179,200
  188,263
  197,773
  207,754
  218,229
  229,222
Total equity, $m
  20,341
  19,592
  20,712
  21,882
  23,104
  24,380
  25,715
  27,110
  28,569
  30,096
  31,694
  33,367
  35,119
  36,954
  38,877
  40,892
  43,004
  45,218
  47,539
  49,973
  52,526
  55,203
  58,012
  60,958
  64,049
  67,292
  70,696
  74,267
  78,015
  81,948
  86,077
Total liabilities and equity, $m
  69,370
  71,765
  75,869
  80,154
  84,630
  89,305
  94,193
  99,303
  104,648
  110,241
  116,094
  122,223
  128,641
  135,363
  142,407
  149,788
  157,524
  165,633
  174,136
  183,052
  192,402
  202,209
  212,497
  223,289
  234,612
  246,492
  258,959
  272,040
  285,769
  300,177
  315,299
Debt-to-equity ratio
  0.110
  0.270
  0.400
  0.520
  0.640
  0.740
  0.840
  0.940
  1.020
  1.110
  1.190
  1.260
  1.330
  1.400
  1.460
  1.520
  1.570
  1.630
  1.680
  1.730
  1.770
  1.820
  1.860
  1.900
  1.930
  1.970
  2.000
  2.030
  2.060
  2.090
  2.120
Adjusted equity ratio
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,534
  1,675
  1,735
  1,806
  1,881
  1,959
  2,041
  2,127
  2,217
  2,312
  2,412
  3,069
  3,179
  3,295
  3,416
  3,544
  3,679
  3,820
  3,969
  4,125
  4,289
  4,462
  4,644
  4,835
  5,037
  5,248
  5,471
  5,705
  5,952
  6,211
  6,484
Depreciation, amort., depletion, $m
  225
  1,467
  1,507
  1,549
  1,594
  1,640
  1,688
  1,739
  1,792
  1,847
  1,905
  1,209
  1,272
  1,338
  1,408
  1,481
  1,558
  1,638
  1,722
  1,810
  1,902
  1,999
  2,101
  2,208
  2,320
  2,437
  2,561
  2,690
  2,826
  2,968
  3,118
Funds from operations, $m
  1,713
  3,142
  3,242
  3,356
  3,475
  3,599
  3,729
  3,866
  4,009
  4,159
  4,317
  4,278
  4,451
  4,633
  4,825
  5,025
  5,236
  5,458
  5,690
  5,935
  6,192
  6,462
  6,745
  7,043
  7,356
  7,686
  8,032
  8,395
  8,777
  9,179
  9,601
Change in working capital, $m
  -3
  -50
  -52
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -119
  -125
  -131
  -138
  -145
  -152
  -159
  -167
  -175
  -184
  -193
Cash from operations, $m
  1,716
  3,192
  3,295
  3,411
  3,532
  3,659
  3,792
  3,931
  4,077
  4,231
  4,392
  4,356
  4,533
  4,719
  4,914
  5,120
  5,335
  5,561
  5,799
  6,049
  6,311
  6,587
  6,877
  7,181
  7,501
  7,837
  8,191
  8,562
  8,953
  9,363
  9,794
Maintenance CAPEX, $m
  0
  -671
  -710
  -750
  -793
  -837
  -883
  -931
  -982
  -1,035
  -1,090
  -1,148
  -1,209
  -1,272
  -1,338
  -1,408
  -1,481
  -1,558
  -1,638
  -1,722
  -1,810
  -1,902
  -1,999
  -2,101
  -2,208
  -2,320
  -2,437
  -2,561
  -2,690
  -2,826
  -2,968
New CAPEX, $m
  -92
  -1,165
  -1,218
  -1,271
  -1,328
  -1,387
  -1,450
  -1,516
  -1,586
  -1,659
  -1,736
  -1,818
  -1,904
  -1,994
  -2,089
  -2,189
  -2,295
  -2,406
  -2,522
  -2,645
  -2,774
  -2,909
  -3,052
  -3,201
  -3,359
  -3,524
  -3,698
  -3,881
  -4,072
  -4,274
  -4,486
Cash from investing activities, $m
  54
  -1,836
  -1,928
  -2,021
  -2,121
  -2,224
  -2,333
  -2,447
  -2,568
  -2,694
  -2,826
  -2,966
  -3,113
  -3,266
  -3,427
  -3,597
  -3,776
  -3,964
  -4,160
  -4,367
  -4,584
  -4,811
  -5,051
  -5,302
  -5,567
  -5,844
  -6,135
  -6,442
  -6,762
  -7,100
  -7,454
Free cash flow, $m
  1,770
  1,356
  1,368
  1,389
  1,412
  1,435
  1,459
  1,484
  1,510
  1,537
  1,565
  1,390
  1,421
  1,453
  1,487
  1,522
  1,559
  1,598
  1,639
  1,682
  1,727
  1,775
  1,825
  1,878
  1,934
  1,993
  2,055
  2,121
  2,190
  2,263
  2,340
Issuance/(repayment) of debt, $m
  130
  3,145
  2,984
  3,115
  3,253
  3,399
  3,553
  3,715
  3,886
  4,066
  4,256
  4,455
  4,666
  4,887
  5,121
  5,366
  5,624
  5,896
  6,181
  6,482
  6,798
  7,130
  7,479
  7,846
  8,232
  8,637
  9,063
  9,510
  9,981
  10,475
  10,994
Issuance/(repurchase) of shares, $m
  52
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  193
  3,145
  2,984
  3,115
  3,253
  3,399
  3,553
  3,715
  3,886
  4,066
  4,256
  4,455
  4,666
  4,887
  5,121
  5,366
  5,624
  5,896
  6,181
  6,482
  6,798
  7,130
  7,479
  7,846
  8,232
  8,637
  9,063
  9,510
  9,981
  10,475
  10,994
Total cash flow (excl. dividends), $m
  1,963
  4,501
  4,352
  4,505
  4,665
  4,834
  5,012
  5,199
  5,396
  5,603
  5,821
  5,846
  6,087
  6,340
  6,607
  6,888
  7,183
  7,494
  7,820
  8,164
  8,525
  8,905
  9,304
  9,724
  10,166
  10,630
  11,118
  11,632
  12,171
  12,738
  13,334
Retained Cash Flow (-), $m
  211
  -1,203
  -1,121
  -1,170
  -1,222
  -1,276
  -1,334
  -1,395
  -1,459
  -1,527
  -1,598
  -1,673
  -1,752
  -1,835
  -1,923
  -2,015
  -2,112
  -2,214
  -2,321
  -2,434
  -2,553
  -2,677
  -2,808
  -2,946
  -3,091
  -3,243
  -3,403
  -3,571
  -3,748
  -3,933
  -4,128
Prev. year cash balance distribution, $m
 
  1,952
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,250
  3,231
  3,335
  3,443
  3,558
  3,678
  3,804
  3,937
  4,076
  4,223
  4,172
  4,335
  4,505
  4,684
  4,873
  5,071
  5,280
  5,499
  5,730
  5,972
  6,228
  6,496
  6,778
  7,075
  7,387
  7,715
  8,060
  8,423
  8,805
  9,206
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  5,034
  2,958
  2,902
  2,835
  2,758
  2,669
  2,570
  2,460
  2,341
  2,214
  1,981
  1,850
  1,713
  1,573
  1,431
  1,289
  1,149
  1,013
  882
  759
  644
  539
  444
  360
  287
  225
  173
  130
  96
  69
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

CME Group Inc., through its exchanges, provides products across all asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The Company's segment primarily consists of the Chicago Mercantile Exchange Inc. (CME), Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX) and Commodity Exchange, Inc. (COMEX) exchanges. The Company provides electronic trading around the globe on its CME Globex platform. The Company also offers clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives through its clearinghouses CME Clearing and CME Clearing Europe. It also provides hosting, connectivity and customer support for electronic trading through its co-location services. The Company's CME Direct platform offers side-by-side trading of exchange-listed and privately negotiated markets.

FINANCIAL RATIOS  of  CME Group Cl A (CME)

Valuation Ratios
P/E Ratio 35.7
Price to Sales 15.2
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 31.9
Price to Free Cash Flow 33.7
Growth Rates
Sales Growth Rate 8.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.3%
Cap. Spend. - 3 Yr. Gr. Rate -6.1%
Financial Strength
Quick Ratio NaN
Current Ratio 1
LT Debt to Equity 11%
Total Debt to Equity 11%
Interest Coverage 28
Management Effectiveness
Return On Assets 2.3%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 5.7%
Return On Equity 7.5%
Return On Equity - 3 Yr. Avg. 6.3%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 72.3%
EBITDA Margin - 3 Yr. Avg. 69.5%
Operating Margin 61.3%
Oper. Margin - 3 Yr. Avg. 59.3%
Pre-Tax Margin 63.6%
Pre-Tax Margin - 3 Yr. Avg. 59.8%
Net Profit Margin 42.7%
Net Profit Margin - 3 Yr. Avg. 38.8%
Effective Tax Rate 33%
Eff/ Tax Rate - 3 Yr. Avg. 35.2%
Payout Ratio 116.5%

CME stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CME stock intrinsic value calculation we used $3595 million for the last fiscal year's total revenue generated by CME Group Cl A. The default revenue input number comes from 2016 income statement of CME Group Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CME stock valuation model: a) initial revenue growth rate of 5.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CME is calculated based on our internal credit rating of CME Group Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CME Group Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CME stock the variable cost ratio is equal to 20.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $671 million in the base year in the intrinsic value calculation for CME stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.8% for CME Group Cl A.

Corporate tax rate of 27% is the nominal tax rate for CME Group Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CME stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CME are equal to 559.7%.

Life of production assets of 123.1 years is the average useful life of capital assets used in CME Group Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CME is equal to -24.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $20341 million for CME Group Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 340.911 million for CME Group Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CME Group Cl A at the current share price and the inputted number of shares is $55.2 billion.

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COMPANY NEWS

▶ An Overview Of CME's Valuation   [Feb-21-18 03:30PM  Forbes]
▶ CME, Estee Lauder, Roku & avoid this tech name   [Feb-20-18 02:42PM  CNBC Videos]
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▶ 6 Notable Dividend Stocks Boost Payouts Amid Market Selloff   [Feb-12-18 09:55AM  InvestorPlace]
▶ [$$] Glitch Exploited by High-Speed Traders is Back at CME   [05:30AM  The Wall Street Journal]
▶ CME Group Announces Retirement of Jack Sandner   [Feb-08-18 12:50PM  PR Newswire]
▶ "Fast Money" final trades: GILD, AAPL and more   [Feb-07-18 05:59PM  CNBC Videos]
▶ What to buy after a big down day: 5 trades   [Feb-06-18 05:00PM  CNBC Videos]
▶ Nvidia, Charles Schwab, eBay & CME Group   [01:45PM  CNBC Videos]
▶ Why Wall Street's Angry About the Bitcoin Gold Rush   [Feb-03-18 07:33AM  Motley Fool]
▶ "Fast Money" final trades: RACE, GS, and more   [Feb-02-18 05:28PM  CNBC Videos]
▶ Bitcoin drops below key $10,000 level   [05:11PM  MarketWatch]
▶ Key Takeaways From CME's Q4   [03:11PM  Forbes]
▶ When To Sell Stocks: Why New Highs In Low Volume Can Halt A Big Run   [Jan-31-18 02:00PM  Investor's Business Daily]
▶ Does Your Broker Allow You To Play Bitcoin, Cryptocash Market?   [08:00AM  Investor's Business Daily]
▶ Is Bank of America's CEO a Two-Faced Bitcoin Critic?   [Jan-18-18 07:39PM  Motley Fool]
▶ [$$] Just Another Day for Bitcoina 25% Plunge   [12:14AM  The Wall Street Journal]
▶ [$$] Just Another Day for Bitcoin---a 25% Plunge   [Jan-16-18 09:21PM  The Wall Street Journal]
▶ CME Earns IBD Stock Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ Top Women Advisors' Best Stock Picks For 2018   [Jan-12-18 10:35AM  Forbes]
▶ Trump NAFTA pullout fears rattle CME hog futures   [Jan-11-18 07:59PM  Reuters]
▶ Bull of the Day: CME Group (CME)   [06:55AM  Zacks]
▶ CME Earns Membership In 95-Plus Composite Rating Club   [03:00AM  Investor's Business Daily]
Financial statements of CME
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