We came across a bullish thesis on Cboe Global Markets, Inc. (CBOE) on Substack by Stock Picker’s Corner. In this article, we will summarize the bulls’ thesis on CBOE. Cboe Global Markets, Inc. (CBOE)’s share was trading at $211.16 as of March 11th. CBOE’s trailing and forward P/E were 29.29 and 23.64 respectively according to Yahoo Finance.
A view of a financial exchange, showcasing the trading activities of the company’s futures and options contracts.
CBOE Global Markets Inc. stands as a rare investment opportunity in today’s turbulent market. As uncertainty grips the U.S. economy, with stocks sliding and consumers growing anxious, CBOE is one of the few companies poised to benefit. While many investors panic, those who recognize CBOE’s unique positioning can turn this volatility into profits. The company operates financial exchanges, including the Chicago Board Options Exchange, and provides critical data analytics, trading tools, and technology for options, futures, and other financial products. With trading volume surging amidst heightened market fears, CBOE has outperformed, rising more than 12% year-to-date while major indices decline. Historically, CBOE’s stock has gained during major market downturns, proving its resilience. As a key player in options trading, the company benefits from increased market activity, capturing fees on every trade. Given the ongoing explosion in retail options trading—where everyday investors, driven by speculative fervor, account for 45% of total volume—CBOE’s growth trajectory remains strong. Despite the high risks retail traders take, CBOE profits consistently, much like a casino collecting a cut from every bet.
Looking ahead, CBOE is positioned for sustained expansion. The global securities exchange market is expected to grow at a 12.1% CAGR over the next five years, with CBOE itself projected to grow earnings at an even faster 13.4% CAGR. This means the company’s earnings could double in just over five years, with its stock price likely following suit. Additional catalysts could accelerate growth. CBOE is expanding its international footprint, diversifying across asset classes and digital trading technologies, and capitalizing on the increasing demand for 24/7 trading. The company has consistently increased its dividend for 13 straight years and maintains a strong capital return program, with $680 million left in share repurchase authorizations. Furthermore, potential industry consolidation could present opportunities, either as a strategic buyer or a takeover target, though its long-term potential makes it more attractive as a long-term holding.
For investors looking to navigate uncertainty with a stock that thrives on market volatility while also delivering steady long-term growth, CBOE represents a compelling opportunity. Its ability to generate revenue in both calm and chaotic markets makes it a standout investment. As retail and institutional trading activity continues to rise, CBOE’s business remains structurally well-positioned. Those who accumulate shares today could see substantial upside as both short-term and long-term market trends play in its favor.
Cboe Global Markets, Inc. (CBOE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held CBOE at the end of the fourth quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of CBOE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CBOE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.