On Oct 8, 2014, Zacks Investment Research upgraded MarketAxess Holdings Inc. (MKTX) by a notch to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Earnings estimates of MarketAxess witnessed a rise on the back of modest second-quarter 2014 results. Improved performance in the European business and increased volatility are also expected to draw stability in volumes going forward. This is also evident from a 4.4% rise in total volumes in the third quarter of 2014, after flattish growth in the second quarter and 16.8% increase in the first quarter.
The company’s modest capital and favorable long-term growth outlook also instill confidence among investors. Additionally, this fixed-income trading exchange operator delivered positive earnings surprises in two of the last four quarters, while breaking even in the remaining two, with an average beat of 6.7%.
On Jul 23, MarketAxess reported second-quarter earnings per share (EPS) of 48 cents. Although it was lower than the year-ago quarter figure by a penny, EPS surpassed the Zacks Consensus Estimate by 4.4%. While revenues grew across segments, higher expenses deteriorated the year-over-year results.
Upward estimate revisions on the stock reflect optimism. The Zacks Consensus Estimate for the 2014 and 2015 moved north by 1.1% and 2.2% to $1.88 and $2.32 per share, respectively, in the last 30 days. On a year-over-year basis, EPS is expected to escalate by about 3.9% in 2014 and 23.1% in 2015.
Moreover, the Most Accurate estimate for Atlas Financial’s 2014 and 2015 earnings currently stand at $1.94 and $2.50 a share, resulting in an Earnings ESP of +3.2% and 7.8%, respectively. With no downward estimate revision, this indicates a likely earnings beat for both the years.
Other Stocks to Consider
Investors interested in financial stocks could also consider Heartland Payment Systems Inc. (HPY), Green Dot Corp. (GDOT), Markit Ltd. (MRKT) and Blackhawk Network Holdings Inc. (HAWK). All these sport the same Zacks Rank as MarketAxess.
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