Cboe Global Markets CBOE has acquired Trade Alert, LLC. Though the terms of the purchase have not been disclosed, the buyout was financed with available cash in hand. The company stated that the purchase price is not material from a financial perspective.
Founded in 2005, New York-based Trade Alert is a real-time alerts and order flow analysis service provider. Its system architecture includes proprietary software, ultra-low latency market data and high-performance computing. It notifies users of market activity and order flow dynamics relevant to their business in real-time. Thus, addition of Trade Alert provides real-time data, market information and alerts to customers.
Trade Alert will be combined with Information Solutions' comprehensive suite of data solutions, analytics and indices. Cboe Global estimates the acquisition to be nominally accretive in 2020
The recent buyout follows acquisitions of Hanweck and FT Options in February and reflects CBOE Global’s concerted effort to enhance its suite of information solutions offerings. The additions of Hanweck and FT Options to the portfolio aid market participants assess their portfolio risk throughout the life cycle of a transaction—from pre-trade to at-trade and post-trade.
Cboe Global looks for businesses that can accelerate the pace of innovation by providing services that are highly complementary to its existing offerings. The recent buyouts are thus in tandem with its strategy.
This Zacks Rank #2 (Buy) options exchange boasts a compelling inorganic growth story. Apart from gaining competitive edge by diversifying as well as adding capabilities, strategic acquisitions diversify Cboe Global’s business mix as well as help in achieving expense synergies. Last month Cboe Global agreed to buy MATCHNow, the largest equities alternative trading system in Canada, from Virtu Financial VIRT.
Shares of Cboe Global have underperformed the industry year to date. The stock has lost 14.1% against the industry’s increase of 1.2%. Nevertheless, solid fundamentals like diversified product portfolio and strong liquidity position should drive the stock going forward.
Other Stocks to Consider
Some other top-ranked stocks in the same space are MarketAxess Holdings MKTX and CME Group CME.
MarketAxess operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. The company delivered a positive surprise of 3.70% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CME Group operates contract markets for the trading of futures and options on futures contracts worldwide. The company delivered a positive surprise of 4.48% in the last reported quarter. It sports a Zacks Rank #2.
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Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
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