Core Viewpoint - Investors in the Securities and Exchanges sector may find London Stock Exchange Group plc - Unsponsored ADR (LSEGY) more attractive than CME Group (CME) based on various valuation metrics and earnings outlook [1] Valuation Metrics - LSEGY has a forward P/E ratio of 21.99, while CME has a forward P/E of 23.90, indicating LSEGY may be undervalued compared to CME [5] - The PEG ratio for LSEGY is 1.89, significantly lower than CME's PEG ratio of 3.97, suggesting LSEGY offers better value when considering expected earnings growth [5] - LSEGY's P/B ratio is 2.05, compared to CME's P/B of 3.4, further supporting the notion that LSEGY is more attractively priced relative to its book value [6] Earnings Outlook - LSEGY currently holds a Zacks Rank of 2 (Buy), indicating an improving earnings outlook, while CME has a Zacks Rank of 3 (Hold), suggesting a less favorable earnings revision trend [3][7] - The positive earnings estimate revisions for LSEGY enhance its attractiveness to value investors [3][7] Value Grades - LSEGY has a Value grade of B, while CME has a Value grade of D, reflecting LSEGY's stronger position in terms of valuation metrics [6]

Core Insights - Data center operators aim for "five nines" reliability, meaning 99.999% uptime, making the recent 10-hour outage at CyrusOne's Aurora facility a significant concern for the industry [1][2] Company Overview - CyrusOne, acquired by KKR & Co. and Global Infrastructure Partners for $15 billion in 2021, is a key player in the data center market, which is increasingly competitive with firms like Blackstone and Blue Owl Capital [2][3] - The company operates over 55 data centers, with the Aurora facility being one of its older properties [5] Incident Analysis - The Aurora data center experienced a major outage due to a series of operational missteps, which led to significant trading disruptions for CME Group Inc. [5][20] - The facility's outdated architecture and lack of automation contributed to the failure, highlighting the risks associated with older data center technologies [20][22] Strategic Positioning - KKR and GIP express confidence in CyrusOne's strategy, emphasizing its potential to benefit from increasing demand in the data center sector [6][8] - The company is focusing on scaling operations and enhancing its competitive position amid the AI boom, although it has fallen behind rivals like QTS in market share [18][19] Financial Backing and Investments - KKR has been heavily involved in financing CyrusOne, including a $7.9 billion loan and a recent partnership with Energy Capital Partners to develop new data centers [4][23] - The firm is committed to investing in infrastructure that supports AI and reduces reliance on traditional power grids [23]

Group 1 - CME Group will hold its 2026 annual meeting of shareholders on May 14, 2026, at 10:00 a.m. Central Time [1] - CME Group is recognized as the world's leading derivatives marketplace, facilitating trading in futures, options, cash, and OTC markets [2] - The company provides a wide range of global benchmark products across major asset classes, including interest rates, equity indexes, foreign exchange, cryptocurrencies, energy, agricultural products, and metals [2] Group 2 - CME Group operates the CME Globex platform for futures and options trading, BrokerTec for fixed income trading, and EBS for foreign exchange trading [2] - CME Clearing is one of the world's leading central counterparty clearing providers [2]

Core Insights - CME Group Inc. has seen a 15.5% increase in shares over the past year, outperforming the industry growth of 8.1% [1] - The company has outperformed peers such as Intercontinental Exchange Inc. (7.5% increase), S&P Global Inc. (4.1% increase), and OTC Markets Group Inc. (4.4% decrease) [1] Market Performance - CME Group has a market capitalization of $98.71 billion, with an average trading volume of 1.9 million shares over the last three months [2] - The company has consistently beaten earnings estimates in the last four quarters, with an average beat of 1.82% [2] Valuation - CME Group shares are currently trading at a forward price-to-earnings ratio of 23.61X, which is lower than the industry average of 23.83X, indicating that the shares are undervalued [3] Technical Analysis - CME shares closed at $273.74, trading above the 50-day and 200-day simple moving averages of $271.90 and $270.71, respectively, suggesting strong upward momentum [4] Revenue Drivers - The company benefits from market volatility, with clearing and transaction fees being the largest revenue drivers [7] - Increased trading activity in cryptocurrencies is also contributing positively to CME's revenue [7] Growth Projections - The Zacks Consensus Estimate projects an 8.4% year-over-year increase in earnings per share (EPS) for 2025, with revenues expected to reach $6.53 billion, reflecting a 6.5% year-over-year improvement [9] - For 2026, EPS and revenues are projected to increase by 4.3% and 4.9%, respectively, compared to 2025 estimates [9] Analyst Sentiment - Recent analyst activity shows that two out of ten analysts have raised their estimates for 2025 and 2026, leading to a slight upward revision in the consensus estimates for both years [10] Price Target - The average price target from 16 analysts is $291.38 per share, indicating a potential upside of 6.4% from the last closing price [11] Strategic Positioning - CME Group is experiencing strong organic growth, benefiting from heightened market volatility and increased electronic trading activity, particularly in crypto assets [13][14] - The company is focused on cost efficiency and has a robust capital base, supporting initiatives to expand its market data business and product offerings [15] Dividend Policy - CME has a strong dividend history, paying five dividends per year, with the fifth being variable based on excess cash flow, making it attractive for yield-seeking investors [16]

Core Insights - CME Group has expanded its cryptocurrency offerings by introducing "spot-quoted" futures for XRP and Solana, allowing for smaller trade sizes and closer tracking of real-time prices [1][3] - This development is significant as it caters to large institutions that prefer regulated trading environments, especially as the crypto derivatives market sees a shift from offshore exchanges to regulated US markets [2][6] Group 1: Product Features - The new XRP and SOL futures contracts are designed to follow the live spot price of the cryptocurrencies, eliminating the complexities associated with traditional futures that often trade at a premium or discount [4][5] - These contracts are the smallest crypto contracts offered by CME to date, targeting active traders who prefer a spot-market approach without the complications of expiry dates [5] Group 2: Market Context - The introduction of these products comes at a time when CME's crypto derivatives volume has surged, with a 129% increase in April 2025 alone, indicating a growing interest from institutional traders [6] - CME has previously implemented similar products for Bitcoin and Ether, which resulted in over 1.3 million contracts traded, showcasing the potential for high trading volumes in these new offerings [4]

Core Insights - CME Group Inc. will announce its earnings for Q4 and the full year of 2025 on February 4, 2026, before market opening [1] - The company will provide written highlights at 6:00 a.m. Central Time and hold an investor conference call at 7:30 a.m. Central Time on the same day [1] Company Overview - CME Group is the world's leading derivatives marketplace, facilitating trading in futures, options, cash, and OTC markets [3] - The company offers a wide range of global benchmark products across major asset classes, including interest rates, equity indexes, foreign exchange, cryptocurrencies, energy, agricultural products, and metals [3] - CME Group operates the CME Globex platform for futures and options trading, BrokerTec for fixed income trading, and EBS for foreign exchange trading [3] - It also functions as a leading central counterparty clearing provider through CME Clearing [3]

Core Insights - Magellan Global Fund focuses on investing in outstanding companies at attractive prices while managing risk through a deep understanding of the macroeconomic landscape [1] - In Q3 2025, global equities rose by 7.3% as measured by the MSCI World Index in USD, but the fund underperformed due to strong performance from more speculative companies [1] Company Highlights - CME Group Inc. (NASDAQ:CME) is highlighted as a core defensive holding within the Magellan Global Fund, operating as the world's leading derivatives marketplace [3] - CME Group Inc. reported a revenue of $1.5 billion in Q3 2025, which represents a 3% decline from the previous year's strong performance [4] - The one-month return for CME Group Inc. was -2.54%, while its shares gained 15.34% over the last 52 weeks, closing at $272.18 per share with a market capitalization of $98.148 billion [2][4] Market Position - CME Group operates a diversified exchange business across major asset classes, including interest rates, equities, foreign exchange, and commodities, providing a natural hedge during market volatility [3] - At the end of Q3 2025, CME Group was held by 77 hedge fund portfolios, an increase from 75 in the previous quarter [4]

Group 1 - CME Group has launched spot-quoted futures contracts for XRP and Solana (SOL), expanding its existing offerings of spot-quoted Bitcoin and Ethereum futures products [1] - The new contracts are priced based on spot prices and feature longer expiration dates, which can reduce the need for frequent rollovers [1] - The contract size is the smallest in CME's cryptocurrency product line, targeting a broader range of retail and professional traders [1] Group 2 - Since their launch in June, the spot-quoted BTC and ETH futures have seen cumulative trading volume exceeding 1.3 million contracts, indicating sustained demand [1]

Core Insights - CME Group has launched Spot-Quoted futures for XRP and Solana, expanding its crypto derivatives lineup to trade closer to real-time market prices [1] - The new contracts are designed to track the spot price directly, unlike traditional futures which may trade at a premium or discount [1] Group 1: Product Launch and Structure - The Spot-Quoted futures for XRP and Solana mirror the structure of existing Spot-Quoted Bitcoin and Ether futures [1] - These contracts are CME's smallest crypto contracts to date, targeting active participants who prefer trading in spot market terms without managing contract expiries or rollovers [2] Group 2: Market Demand and Performance - Since their launch in June, Spot-Quoted Bitcoin and Ether contracts have seen over 1.3 million contracts traded, with an average daily volume of 11,300 contracts [3] - A record of 60,700 contracts was traded on November 24, indicating strong market interest [3] Group 3: Additional Features - CME has activated Trading at Settlement (TAS) for XRP, SOL, and their respective Micro futures, allowing traders to execute contracts at a spread to the 4:00 p.m. ET settlement price [4] - TAS is particularly useful for managing risk around crypto ETFs and allows for block trades and anonymous order book activity via CME Globex [4] Group 4: Recent Developments - The launch of Spot-Quoted futures follows CME Group's introduction of options on SOL, Micro SOL, XRP, and Micro XRP futures in October [5]

Core Insights - CME Group has launched Spot-Quoted XRP and SOL futures, expanding its cryptocurrency offerings alongside existing Spot-Quoted Bitcoin and Ether futures [1][2]. Group 1: Product Launch and Features - The new Spot-Quoted XRP and SOL futures are designed to complement the existing Spot-Quoted Bitcoin and Ether futures, providing investors with the ability to trade futures positions in spot-market terms with longer-dated expiry [2]. - These contracts are aimed at everyday traders, featuring the smallest contract sizes within the Crypto complex, enhancing market accessibility and precision for clients [3]. - Spot-Quoted futures allow traders to maintain positions according to their long-term views or trade in and out more easily without frequent rolling of positions [3]. Group 2: Market Demand and Performance - Since their launch in June, Spot-Quoted Bitcoin and Ether futures have seen strong demand, with over 1.3 million contracts traded [3]. - The average daily volume (ADV) for the launch-to-date stands at 11,300 contracts, with Q4 ADV at 18,400 contracts and December ADV reaching 35,300 contracts [6]. - A record trading day was noted on November 24, with 60,700 combined Spot-Quoted Bitcoin and Ether futures traded [6]. Group 3: Company Overview - CME Group is recognized as the world's leading derivatives marketplace, enabling clients to trade across various asset classes, including cryptocurrencies, and manage risk effectively [4]. - The company operates multiple trading platforms and is a prominent central counterparty clearing provider [4].