Marketaxess Holdings (MKTX) operates an electronic trading platform for fixed income securities such as corporate bonds, high yield crossover bonds, emerging market bonds, structured products, preferred stocks and credit default swaps as well as provides market data, analytical tools and trading services. They have offices across the world trading with central banks, sovereign wealth funds, pension funds and investment managers.

The company recently expanded its trading system to include the municipal bond market that adds access to $3.6 trillion of market capitalization. They provide their services to 60 dealers and 250 institutional investor firms to this market in addition to their 1,000 institutional investors and broker dealers using the corporate bond platform.

Recent announcements talk of increases in monthly trading volume approaching $119 billion in U.S. high grade securities, credit and liquid products. The company reports both reported and adjusted estimated volumes in their reports. I am cautious when any company reports “estimated” financial and market values especially when they must caution the reader in the report that the numbers relate to future results and events. It also cautions me about the uncertainty of interest rate expectations, market volatility and, most importantly, that actual results may differ “materially” from the anticipated results. Why use them?

Therefore, making a decision on strictly fair valuations the stock has confirmed a SELL consideration. It is currently at 139.7% FV and with a low dividend yield at 0.84% there are plenty of opportunities that offer a better probability of income and increased value potential. The stock also scores A on merger/acquisition sensitivity. The stock has added almost 11% so far this year but, we think the time has come to consider selling and reinvesting elsewhere.