Riding on a strong growth momentum, shares of MarketAxess Holdings Inc. MKTX scaled a new 52-week high of $87.80 on Mar 12, 2015. Solid 2014 results, improved volumes and raised outlook for 2015 fueled the traction in the stock. This Zacks Rank #1 (Strong Buy) stock’s price has surged about 22.6% since the beginning of 2015 only.
While about 249K million shares exchanged hands in the latest trading session, the average volume of shares traded over the last three months stands at approximately 173.5K. Yesterday’s closing price represents a solid one-year return of about 33.3%, against 12.8% clocked by the Nasdaq index.
Rationale
MarketAxess Holdings is benefiting from the increased volatility in the credit markets, which has also facilitated total volumes growth of 22.6% in the first two month of 2015. This is laudable as it raises scope for another fruitful quarter for the company. Additionally, management’s consistent European expansion strategy via new credit products and rewarding alliances, amid disciplined expense management, remains impressive.
Additionally, MarketAxess Holdings has delivered positive earnings surprises in three of the last four quarters, with an average beat of 2.5%. The company’s fourth-quarter 2014 operating earnings of 57 cents per share topped the Zacks Consensus Estimate by 9.6% and the year-ago figure by 39%.
Furthermore, an improved outlook prompted upward estimate revisions for 2015 and 2016 earnings. The Zacks Consensus Estimate for 2015 rose by 2.1% to $2.43 per share in the last 30 days, while the same for 2016 grew 1.4% to $2.88 a share.
Moreover, the Most Accurate estimate for MarketAxess Holdings’ 2015 and 2016 earnings currently stand at $2.55 and $3.10 a share, resulting in Earnings ESP of +4.9% and +7.6%, respectively. This reflects a steady growth momentum.
Key Picks in the Sector
Investors interested in the financial sector may consider other favorably-placed stockslike Markit Ltd. MRKT, Cowen Group Inc. COWN and JMP Group Inc. JMP, all of which sport the same Zacks Rank as MarketAxess Holdings.
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