MarketAxess Holdings Inc. Reports Operating Results (10-K)
Marketaxess Holdings Inc. has a market cap of $649.5 million; its shares were traded at around $21 with a P/E ratio of 26.3 and P/S ratio of 4.4. The dividend yield of Marketaxess Holdings Inc. stocks is 1.7%. Marketaxess Holdings Inc. had an annual average earning growth of 2.6% over the past 5 years.Hedge Fund Gurus that owns MKTX: Paul Tudor Jones of The Tudor Group, George Soros of Soros Fund Management LLC. Mutual Fund and Other Gurus that owns MKTX: John Keeley of Keeley Fund Management, RS Investment Management, Chuck Royce of Royce& Associates, PRIMECAP Management.
Highlight of Business Operations:The total amount of U.S. corporate bonds outstanding has grown from $5.3 trillion as of December 31, 2006 to $7.4 trillion as of September 30, 2010. The estimated average daily trading volume of U.S. corporate bonds (investment grade and high yield), as measured by TRACE, has increased from approximately $14.1 billion in 2006 to $16.8 billion in 2010.
We define the high-yield bond market generally to include all debt rated lower than BBB- by Standard & Poors or Baa3 by Moodys Investor Service. We define the crossover market to include any debt issue rated below investment grade by one agency but investment grade by the other. The total amount of high-yield corporate bonds yearly issuance was $146.6 billion for the year ended December 31, 2006 but declined to $43.0 billion during 2008, primarily due to the risk aversion among corporate bond investors that severely limited the ability of high-yield issuers to raise new debt. The high-yield corporate bond markets demonstrated significant improvement throughout 2009 and 2010, with new issuance for the year ended December 31, 2010 increasing to $273.0 billion.
FINRA publicly disseminates real-time price information on approximately 12,000 high-yield corporate bond issues and certain other transactions on a delayed basis. Trades in bonds rated BB and lower are subject to immediate dissemination if the trade size is less than $1 million, or greater than $1 million and trades an average of once or more a day. The average daily trading volume of high-yield bonds reported by FINRA for the year ended December 31, 2010 was $5.2 billion.
Asset-backed securities are ownership interests in a pool of receivables sold by originators into a special purpose vehicle. These securities are typically secured by pools of homogeneous assets with relatively predictable cash flows. The assets are legally separated from the seller, which limits the investors exposure to the credit quality of the seller. In 2010, $107 billion in U.S. asset-backed securities were issued, a decrease from $151 billion in 2009. The total amount of U.S. asset-backed securities outstanding at the end of 2010 was $2.2 trillion.
Our total trading volume increased from $339.6 billion in 2006 to $402.3 billion in 2010. We believe our trading volumes in 2008 and 2009 reflect the turmoil and resultant lack of liquidity in the credit markets beginning in the third quarter of 2007. Our total trading volume over the past five years is indicated below:
Competitive Prices. By enabling institutional investors to simultaneously request bids or offers from our broker-dealer clients, we believe our electronic trading platform creates an environment that motivates our broker-dealer clients to provide competitive prices and gives institutional investors confidence that they are obtaining a competitive price. For typical MarketAxess multi-dealer corporate bond inquiries, the range of competitive spread-to-Treasury responses is, on average, approximately 10 basis points (a basis point is 1/100 of 1% in yield). As an example of the potential cost savings to institutional investors, a one basis point savings on a $1 million face amount trade of a bond with 10 years to maturity translates to aggregate savings of approximately $775.00.
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