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Stockchase Opinions

John ManleyChicago Mercantile ExchangeCMETOP PICKApr 16, 2007

This is the exchange that trades futures and options. They are in a bid now to buy the Chicago Board of Trade. Sees the consolidation in this area being very positive. Thinks the next resistance level is $580. Earnings come out on April 24, so wait for that. Because it is expensive, he would play it with options.
$558.74

Stock price when the opinion was issued

Unknown
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Shares are too cheap vs. its growth rate.
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COMMENT

Time to move out of US banks? BAC-N lots of levers to earn money. It trades a little higher than book value. The valuation is okay, but is trading fair value. He would not be compelled to buy at time. He would roll this position into holding the exchanges -- like CME-N

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(A Top Pick Feb 08/18, Up 19%) A conservative holding, which sees strong reoccurring revenue for the exchange. He thinks as the market volatility increases, it will also benefit. -- a bit counter-cyclical with some price insensitivity.
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It is a major derivative exchange with a data group with a high margin business. Trading volumes will go up with increased volatility and will add to their bottom line. The scale is large enough to allow for further global acquisitions. Yield 1.7%. (Analysts’ price target is $176.09)

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It is more defensive. When you have to be an investor, you love these. When markets go sideways and wonky, this one goes up. They are firing on all cylinders. (Analysts’ target: $166.60).

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It helps if there is lots of volatility in the market so they get more trading volumes. It has to reverse itself.

COMMENT
Because it has the futures and derivatives, it will eventually be one of the major beneficiaries.
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Merging with the Chicago Board of Trade. Great company with a great upside potential from all of the derivatives that need to go on to an exchange. A lot of talk of how there is going to have to be central clearing on a lot of these contracts. Great growth business. Huge competitive advantages. There is risk because current earnings are not that big.
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A pure play on trading volumes in equity markets as well as commodity markets. Feels we're in a bull market on commodity prices. Seeing increased amounts of contracts that are being traded regularily. As continued interest in basic materials moves on, there'll be increased trading volumes.
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Likes capital markets. Trades similarily to the way the TSE shares trade. Benefits from the increased interest in commodities. Volumes are up about 30% this year.