MarketAxess: A "Bond Bookie"

06/26/2020 5:00 am EST

Focus: FINANCIALS

Tony Sagami

Editor, Weiss Ratings LLC's Weiss Ultimate Portfolio

Most retail investors have never heard of MarketAxess, (MKTX) but it is a household name among the Wall Street crowd, explains Tony Sagami, contributing editor to Weiss Ultimate Portfolio.

MarketAxess is the "New York Stock Exchange" of the bond market. It has an electronic trading platform that institutional investors use to trade corporate bonds, junk bonds, emerging market bonds, U.S. agency bonds and other more exotic fixed-income instruments, like CLOs (collateralized loan obligations).

Trailing 12 months charts

Like a bookie, MarketAxess shaves a tiny commission on every bond that trades through its platform. And boy does MarketAxess do a ton of volume. Last month, it handled $519.7 billion worth of trades.

MarketAxess has two tailwinds that are going to push its profits and stock price higher:

• The massive bond buying binge that the Federal Reserve and other central bankers are on.

• The high volume, high frequency algorithm that allows traders to trade bonds like there’s no tomorrow.

Lastly, MarketAxess is a rare company that could actually see its revenues and profits soar when the stock market tumbles. It recently traded near $508.12. It’s worth the protection.

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MarketAxess: A "Bond Bookie"
06/26/2020 5:00 am EST

Most retail investors have never heard of MarketAxess, (MKTX) but it is a household name among the W...