Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
Growth Stock Analysis as of 14 October 2023
Top Growth Stock Holdings
NASDAQ: MKTX
- MarketAxess’s platform makes bond trading more accessible, ultimately improving transparency, efficiency, and competition in the marketplace.
- Since 2000, MarketAxess has emerged as a leading force in institutional electronic trading in fixed-income securities, one of the world’s largest asset classes.
- Its business model is based on the network effect, which means that the value of its platform increases as more participants join and trade on it.
- This company has a large and diverse network of over 1,800 institutional investors and dealers across the global fixed-income market.
- The company also invests in new products and services, such as centralized fixed-income trading, algorithmic trading, and ESG integration.
- MKTX boasts a scalable business model with compelling features that confer a competitive edge, positioning it as a sustained driver of long-term growth. The expanding client network serves as additional evidence of this strength.
What we think are pros of business:
- MKTX seems to be in a robust financial position, marked by substantial revenue growth. This growth is primarily attributed to the rising demand for its electronic trading solutions.
- The company’s Open Trading platform, facilitating all-to-all trading among network participants, has played a pivotal role in driving this demand.
- MKTX has great profitability and efficiency because its scalable and innovative business strategy provides strong margins.
- It has a better capital structure having the balance of debt and equity in a proportionate manner.
What we think the risks are:
- MKTX faces the risk of facing regulatory changes or challenges in the markets where it operates, especially in the emerging markets where it has recently launched Open Trading for local currency bonds.
- These evolving markets may have different or evolving rules and standards for electronic trading, data protection, taxation, and anti-money laundering.
- This sector will be highly competitive and the outperformance of MKTX’s competitors impact its own performance in the last 3 years.
- It relies on third-party suppliers and service providers for some of its key products and services, such as data centers, cloud computing, and network connectivity, this may lead to an increase in the risk of uncertainty.
Fundamentals:
- Market Cap: 9 Billion
- Revenue: 733.03 M
- EPS: 6.72
- Dividend: 2.88 (1.28%)
- 52 wk Range: 200.01 to 399.78
- ROE (5yr): 30.2%
Technical for a long-term perspective:
– Taking support at the previous support zone, from where a breakout happened in 2019.
– The chart seems like it will create a double bottom pattern and reverse to the higher levels.
– For high confirmation trade, It will give a Breakout on Monthly charts above 250.
– It has shown up a good trading volume with a higher delivery percentage.
– RSI is very bullish at current levels seems like it is reversing from the lower level.
Entry = 238
Stop Loss = 200
Target = 400 / 550.
Our Final Thought:
MarketAxess seems well-prepared to grow thanks to important industry trends. Their strong financial standing and strategy to offer better products are positive signs. In my opinion, MKTX looks like a good investment due to its strong business model and the introduction of new trading options. Also, it seems to be doing well according to technical analysis. However, I’m not sure how MKTX will do if the overall stock market goes down. It has already fallen a lot from its highs, but it’s still relatively expensive compared to the rest of the market. On the basis of technical charts (monthly) it it goes down to touch it 200 EMA line and then must exit below 200 but as of now the price action is positive and it will reverse to the higher levels. The company has very low debt risk is evident due to its minimal debt, which is entirely covered by both the current cash reserves and the incoming cash flows.
Please note this is only an opinion and not financial advice. Direct stock investing is subject to business and market risks. Therefore, it’s highly recommended to do proper risk management and your own due diligence before investing.
More Articles on Longterm Stock Analysis
Join our Discord Community for the Latest News Updates and Trading Ideas.