MarketAxess Holdings (MKTX) Showing Signs Of Being Strong And Under The Radar

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.

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 $17.6 million.
  • MKTX is making at least a new 3-day high.
  • MKTX has a PE ratio of 4.
  • MKTX is mentioned 1.13 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 0.9%. MKTX has a PE ratio of 4. Currently there are no analysts that rate MarketAxess Holdings a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for MarketAxess Holdings has been 213,400 shares per day over the past 30 days. MarketAxess has a market cap of $3.2 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.37 and a short float of 1.6% with 3.28 days to cover. Shares are up 20% year-to-date as of the close of trading on Thursday.

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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, notable return on equity, reasonable valuation levels, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 22.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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.
  • The gross profit margin for MARKETAXESS HOLDINGS INC is rather high; currently it is at 56.16%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 32.03% significantly outperformed against the industry average.
  • Powered by its strong earnings growth of 41.30% and other important driving factors, this stock has surged by 56.08% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MKTX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

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