Just found an interesting piece comparing the red hot Chicago Mercantile Exchange Holdings (ticker: CME) to Google’s explosive stock price.
…Chicago Mercantile Exchange Holdings (CME), now trading at $435.25, more than 12 times its IPO price from December 2002. The price is at the same high altitude as GOOG, and people understandably wonder if there’s a kind of dot-com fever infecting both issues. ….
Profit margin: 31.4 percent for CME, 23.9 percent for GOOG; return on equity, 31.8 percent for CME, 23.8 percent for GOOG; forward estimated price/earnings ratio: 32 for CME, 28.8 for GOOG. GOOG’s revenue growth is greater, but CME has less competition. And both balance sheets have piles of cash with no debt.
CME, though, has one clear advantage over GOOG. Its progress is transparent. With more than 70 percent of its revenue coming from trading fees, all an investor has to do is check the daily volume reports. GOOG has been criticized for not being forthcoming about revenue sources. With CME, its an earnings “surprise” only if you haven’t been paying attention.
Interesting point about that transparency…