Brett Girard, CPA, CA, CFA MarketAxess MKTX-Q DON'T BUY Mar 25, 2022

This thrived during Covid lockdowns last year when MKTX's digital bond trading replaced the long tradition of doing it manually (70% of corporate bonds were before Covid). A great stock and soared in 2020, but it's stalled lately as the world expects a reopening. If you think bond traders will stay digital, this is a great long-term story.

Among the biggest losers on the S&P in 2021 #5, down 28%. He likes this a lot. They were the first to digitize bond trading, but now face a lot of competition. Hence, the sharp downturn. The only way this can come back is a massive spike in bond trading.

As interest rates increase and stock volatility goes up, more trading will occur on the company's platform. Company has good financial metrics. Believes company is over valued at current prices. Wait for market correction.

Traditionally, bonds were sold over the phone. This was inefficient. Their specialty is corporate bonds, but they do them all, domestic and emerging. Platform has been very successful, spectacular revenue growth. Business economics and balance sheet are phenomenal. Strong management. Problem is it's a tech company. Competitor has gained market share quickly. 2021 revenue growth muted. He's paused on the sector and this company.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

The company's business is more dependent on volume rather than pricing, but estimates do call for higher earnings this year and next year. It has no debt and some cash and its Q1 was better than expected. We think it looks decent today but its high valuation (36X earnings) likely holds off some investors.
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