MarketAxess - leader in corporate bonds (BUY - 500)

MarketAxess Holdings Inc., together with its subsidiaries, operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments worldwide.

It offers institutional investor and broker-dealer firms the access to global liquidity in U.S. high-grade corporate bonds, emerging markets and high-yield bonds, European bonds, U.S. agency bonds, municipal bonds, leveraged loans, credit default swaps, and other fixed-income securities.

The company, through its Open Trading protocols, executes bond trades between and among institutional investor and broker-dealer clients in an all-to-all anonymous trading environment in which it acts as the matched principal counterparty.

It also offers trading-related products and services, including Composite+ pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to optimize trading environments.

In addition, the company, through its Trax division, offers a range of pre-and post-trade services, such as trade matching, trade publication, regulatory transaction reporting, and market and reference data across a range of fixed-income and other products. MarketAxess Holdings Inc. was founded in 2000 and is headquartered in New York, New York.

Share price & revenues

Today, it is the market leader in the electronic trading of US corporate bonds, with 85% of investment-grade and 84% of high-yield debt traded electronically on its platform. That equates to 20% of all corporate bond trading volume in the US. As of April 2018, the company is valued at $8.5bn.

Clearly the company has potential for more growth, as it has a significant share of bonds trading at its platform, with a market cap of only 15B$. The growth-strategy is oriented by three factors;

Given their leading position in the U.S. market and the coming regulatory shifts in terms of credit-products' trading,  as well as increasing use of algorithmic trade-execution, the company is well-positioned for further growth.  

I would therefore set a target price of 500$ for Q1 - 2020.