Trade-Ideas: MarketAxess Holdings (MKTX) Is Today's Strong And Under The Radar Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified MarketAxess Holdings ( MKTX) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified MarketAxess Holdings as such a stock due to the following factors:

  • MKTX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $9.7 million.
  • MKTX is making at least a new 3-day high.
  • MKTX has a PE ratio of 36.4.
  • MKTX is mentioned 0.55 times per day on StockTwits.
  • MKTX has not yet been mentioned on StockTwits today.
  • MKTX is currently in the upper 20% of its 1-year range.
  • MKTX is in the upper 35% of its 20-day range.
  • MKTX is in the upper 45% of its 5-day range.
  • MKTX is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on MKTX:

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide. The stock currently has a dividend yield of 1%. MKTX has a PE ratio of 36.4. Currently there is 1 analyst that rates MarketAxess Holdings a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for MarketAxess Holdings has been 236,400 shares per day over the past 30 days. MarketAxess has a market cap of $2.5 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.71 and a short float of 2.7% with 6.76 days to cover. Shares are down 4.1% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates MarketAxess Holdings as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.0%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for MARKETAXESS HOLDINGS INC is rather high; currently it is at 50.98%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.24% significantly outperformed against the industry average.
  • MARKETAXESS HOLDINGS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MARKETAXESS HOLDINGS INC increased its bottom line by earning $1.82 versus $1.64 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $1.82).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Diversified Financial Services industry and the overall market, MARKETAXESS HOLDINGS INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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