MarketAxess Holdings, Inc

MarketAxess (NASDAQ: MKTX) brings over 14 years of unparalleled trading, market data and technology innovation to the global institutional credit markets.

MarketAxess was formed in April of 2000 in response to investors’ need for a single trading platform with easy access to multi-dealer competitive pricing in a wide range of credit products. MarketAxess has since expanded and deepened its trading network with North America’s premier institutional investors, which include investment advisers, mutual funds, insurance companies, public and private pension funds, bank portfolios and hedge funds, and leading broker-dealers, both primary dealers and regional firms. MarketAxess offers dealers significant presence in secondary markets, providing a broad base of credit securities and deep pool of liquidity for our institutional investor clients.

marketaxess

The U.S. trading system supports fully-disclosed electronic trading in high-grade corporate bonds, high yield/crossover bonds, emerging markets bonds, municipal bonds, U.S. agency securities, structured products, preferred stock and credit default swaps (CDS).

MarketAxess Europe Limited, the wholly-owned U.K. subsidiary of MarketAxess Holdings Inc., operates in London and first launched European secondary trading in U.S. dollar and Euro-denominated Eurobonds in 2001. Since then, the platform has added trading in other European credit products including bonds issued in Pounds, Sterling, and floating rate notes (FRNs) and has since successfully expanded into sovereigns, supras, agency and covered bonds. MarketAxess Europe Limited was the first platform in Europe to offer this capability for corporate bonds. As of 2006, European institutional clients can access U.S. credit liquidity, provided they have established trading relationships with U.S. dealers.

In 2010, MarketAxess expanded its credit trading platform to include institutional investors in the Asia Pacific region. Central banks, sovereign wealth funds, pension funds and asset and wealth managers are able to trade U.S. and European corporate bonds, Asian credits, emerging markets bonds and CDS with MarketAxess’ global network of broker dealers. MarketAxess is a Recognized Market Operator in Singapore and an Authorized Automated Trading Service in Hong Kong.

MarketAxess continues to expand its reach into the Americas. In 2012, MarketAxess received regulatory approval to trade local currency debt in Brazil. Institutional investors have seamless access to both global and Brazilian fixed income liquidity through the MarketAxess electronic trading platform. MarketAxess also received approval to operate its electronic trading platform in Quebec, Canada, having operated in Ontario since 2008. Institutional investors in Ontario and Quebec can trade U.S. and European fixed income and derivatives products on MarketAxess.

Regulatory pressures and increased capital requirements are driving various shifts in the credit and derivatives markets. In 2012, MarketAxess introduced Open Trading as a flexible, comprehensive solution for institutional investors and dealers to source liquidity in today’s complex markets. Open Trading offers anonymous all-to-all trading as well as MarketAxess’ established disclosed request-for-quote trading technology. In April 2013, BlackRock and MarketAxess formed a strategic alliance to create a unified electronic trading solution as part of the Open Trading initiative.

MarketAxess maintains its headquarters in New York and has offices in London, Boston, Chicago, Los Angeles, Salt Lake City, Sao Pãulo and Singapore.

  • Political and Macroeconomic Analysis.

MarketAxess, is domiciled in the US and listed on the NASDAQ. Currently US and left behind the 2008 crisis , but its economy still receives stimuli of 2 types, bond purchases by the Fed and interest rates virtually at 0 , it is expected that this monetary policy harden over the next 6 months.

US growth indicators 2012 2013 2014 2015 2016 (e)
GDP (billions of dollars) 16.155,25 16.663,15 17.348,08 17.968,20e 18.697,92
GDP (annual growth in% , constant prices) 2,2 1,5 2,4 2,6e 2,8
GDP per capita (USD) 51.384 52.608 54.370 55.904e 57.766
Balance of public finances (% of GDP) -6,2 -4,1 -3,6 -3,1e -3,0
State debt (% of GDP) 102,5 104,8 104,8 104,9e 106,0
Rate of inflation (%) 2,1 1,5 1,6 0,1e 1,1
Unemployment rate (% of labor force) 8,1 7,4 6,2 5,3 4,9
Balance of current transactions (billions of dollars) -449,67 -376,76 -389,53 -460,62e -551,50
Balance of current transactions (% of GDP) -2,8 -2,3 -2,2 -2,6e -3,0

Note: (e) Estimated data

  • Sectorial analysis.

Compared with the direct competitor.

MKTX Tendencia del precio volumen (TPV)1 BGCP GFIG Sectores
Market capitalization: 6,1MM N/A 2,48MM 1,05MM 2,54MM
Employees: 342 114 7.841 N/A 1,09Mil
Quarterly revenue growth (yoy): 0,28 N/A -0,02 N/A 0,15
Revenue (ttm): 336,05Mill 188,5Mill1 2,59MM N/A 2,03MM
Gross Margin (ttm): 0,68 N/A 0,93 N/A 0,81
EBITDA (ttm): 184,11Mill N/A N/A N/A 13,67Mill
Net operating income (ttm): 0,50 N/A -0,04 N/A 0,24
Net income (ttm): 109,29Mill N/A 132,77Mill N/A N/A
EPS (ttm): 2,90 N/A 0,48 -0,12 0,36
Price/Earnings (P/E) (ttm): 55,94 N/A 18,61 N/A 16,28
PEG (5 yr): 2,98 N/A 0,86 N/A 0,98
Price / sales (P/S) (ttm): 18,14 N/A 0,97 N/A 2,21

TPV1 = Tradeweb Markets LLC (privately held)
BGCP = BGC Partners, Inc.
GFIG = GFI Group Inc.
Industria = Investment Brokerage – National
1 = from 2015

Investment Banking Companies Ranked By Investment Banking Sales
Compañía Símbolo Precio Cambio Capitalización de mercado Precio/Beneficio (P/E)
Citigroup Global Markets Holdings Inc. “Privado”
JPMorgan Chase & Co. JPM 65,32 -0,00 235,9MM 11,07
The Goldman Sachs Group, Inc. GS 163,25 -0,00 69,61MM 15,48
Morgan Stanley MS 29,17 -0,01 55,77MM 13,49
MERRILL LYNCH & CO., INC. “Privado”
Lehman Brothers Holdings Inc. “Privado”
UBS Investment Bank “Privado”
DEUTSCHE BANK AG “Privado”
  • Business analysis.
MKTX MarketAxess Holdings Inc. daily Stock Chart
Index P/E 55.94 EPS (ttm) 2.90 Insider Own 3.70% Shs Outstand 37.49M Perf Week -0.21%
Market Cap 6.08B Forward P/E 42.00 EPS next Y 3.86 Insider Trans -8.59% Shs Float 36.63M Perf Month 7.24%
Income 109.30M PEG 3.32 EPS next Q 0.79 Inst Own 97.40% Short Float 2.21% Perf Quarter 24.41%
Sales 336.00M P/S 18.10 EPS this Y 29.20% Inst Trans -1.78% Short Ratio 2.20 Perf Half Y 49.62%
Book/sh 11.83 P/B 13.71 EPS next Y 19.49% ROA 24.50% Target Price 143.75 Perf Year 72.98%
Cash/sh 4.09 P/C 39.67 EPS next 5Y 16.83% ROE 27.10% 52W Range 85.49 – 163.39 Perf YTD 46.26%
Dividend 1.04 P/FCF EPS past 5Y 26.00% ROI 24.60% 52W High -0.71% Beta 0.77
Dividend % 0.64% Quick Ratio Sales past 5Y 15.70% Gross Margin 90.80% 52W Low 89.74% ATR 2.50
Employees 342 Current Ratio Sales Q/Q 27.90% Oper. Margin 49.80% RSI (14) 72.28 Volatility 1.10% 1.62%
Optionable Yes Debt/Eq 0.00 EPS Q/Q 36.30% Profit Margin 32.50% Rel Volume 0.33 Prev Close 161.99
Shortable Yes LT Debt/Eq 0.00 Earnings Jul 28 BMO Payout 30.90% Avg Volume 366.98K Price 162.22
Recom 3.20 SMA20 3.15% SMA50 8.84% SMA200 31.23% Volume 121,296 Change 0.14%

From the data shown here we see that the macroeconomic environment of the company is a stable environment with sustained economic growth, and a predictable rise in interest rates and elimination of economic incentives that negatively affect the share price of the company.

MarketAxess trading well above that rival companies as P/E ratio, a fact that could lead to a correction value.

Regarding the ratios own company:

CBOE Holdings
P/E Ratio 55,94
P/S Ratio 18,10
P/Free CF Ratio 39,67
P/BV Ratio 13,71
 PEG 3,32

As these ratios the company is overvalued and should have a correction value at the time that the US tighten its monetary policy.

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