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Should You Dump CBOE Holding (CBOE) from Your Portfolio?
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On Sep 7, 2016, Zacks Investment Research downgraded CBOE Holdings Inc. (CBOE - Free Report) to a Zacks Rank #4 (Sell).
Why the Downgrade?
CBOE Holdings has been witnessing downward estimate revisions after reporting soft August numbers as well as lower-than-expected second-quarter 2016 earnings. Shares of this securities exchange have been on a downtrend of late. In fact, the stock dipped 0.6% since the company reported soft August volumes. Given its expected negative earnings growth rates for the upcoming quarter, we anticipate the stock to decline further.
CBOE Holdings’ average daily volume for August plunged 31% year over year to 4.1 million contracts, despite two extra trading days than the year-ago period. Total options contracts decreased 25% to 89.7 million and total futures contracts were down 26% to 4.8 million. Trading volumes across all verticals too declined in August.
With respect to its second-quarter results, the bottom line missed our expectations. Though revenues improved, increase in operating expenses offset the growth. This led to operating margin contraction. Management expects core operating expenses between $211 and $215 million for 2016. Also, cash and cash equivalents declined, whereas long-term liabilities increased over the 2015-end level. The company delivered back-to-back negative surprise with the second-quarter earnings miss.
The Zacks Consensus Estimate for 2016 and 2017 moved down as most of the estimates were revised lower in the last 60 days. The same moved south by 2% to $2.43 for 2016 and 1.5% to $2.68 for 2017.
Not all finance stocks, however, are performing as poorly as CBOE Holdings. Some better-ranked stocks from the same space include Bats Global Markets , MarketAxess Holdings Inc (MKTX - Free Report) and Arbor Realty Trust Inc. (ABR - Free Report) , each carrying a Zacks Rank #2 (Buy).
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Should You Dump CBOE Holding (CBOE) from Your Portfolio?
On Sep 7, 2016, Zacks Investment Research downgraded CBOE Holdings Inc. (CBOE - Free Report) to a Zacks Rank #4 (Sell).
Why the Downgrade?
CBOE Holdings has been witnessing downward estimate revisions after reporting soft August numbers as well as lower-than-expected second-quarter 2016 earnings. Shares of this securities exchange have been on a downtrend of late. In fact, the stock dipped 0.6% since the company reported soft August volumes. Given its expected negative earnings growth rates for the upcoming quarter, we anticipate the stock to decline further.
CBOE Holdings’ average daily volume for August plunged 31% year over year to 4.1 million contracts, despite two extra trading days than the year-ago period. Total options contracts decreased 25% to 89.7 million and total futures contracts were down 26% to 4.8 million. Trading volumes across all verticals too declined in August.
With respect to its second-quarter results, the bottom line missed our expectations. Though revenues improved, increase in operating expenses offset the growth. This led to operating margin contraction. Management expects core operating expenses between $211 and $215 million for 2016. Also, cash and cash equivalents declined, whereas long-term liabilities increased over the 2015-end level. The company delivered back-to-back negative surprise with the second-quarter earnings miss.
The Zacks Consensus Estimate for 2016 and 2017 moved down as most of the estimates were revised lower in the last 60 days. The same moved south by 2% to $2.43 for 2016 and 1.5% to $2.68 for 2017.
CBOE HOLDINGS Price and Consensus
CBOE HOLDINGS Price and Consensus | CBOE HOLDINGS Quote
Stocks to Consider
Not all finance stocks, however, are performing as poorly as CBOE Holdings. Some better-ranked stocks from the same space include Bats Global Markets , MarketAxess Holdings Inc (MKTX - Free Report) and Arbor Realty Trust Inc. (ABR - Free Report) , each carrying a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>