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Should Value Investors Buy MarketAxess Holdings (MKTX) Stock?

Alex Smith

Baron Asset Fund recently published its second-quarter commentary – a copy of which can be downloaded here. During the second quarter of 2020, the Baron Asset Fund returned 28.02% (institutional shares). In comparison, the benchmark S&P 500 Index was up 20.54%, while the Russell Midcap Growth Index was up 30.26%. You should check out Baron Asset Fund’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Baron Asset Fund highlighted a few stocks and MarketAxess Holdings Inc (NASDAQ:MKTX) is one of them. MarketAxess Holdings Inc (NASDAQ:MKTX) is a financial services company. Year-to-date, MarketAxess Holdings Inc (NASDAQ:MKTX) stock gained 42.3% and on July 10th it had a closing price of $537.23. Here is what Baron Asset Fund said:

"MarketAxess Holdings Inc. operates the leading electronic platform for trading corporate bonds. Its shares outperformed as ongoing market volatility coupled with the company’s continued market share gains drove 44% growth in credit trading volume during its most recent quarter. This figure was more than double the market’s 19% growth rate. We believe that recent market disruptions have led traders increasingly to turn to MarketAxess’s platform for liquidity and price improvement, further cementing the company’s network effects. We believe the company will be the prime beneficiary of the ongoing secular shift to electronic trading in the corporate bond market."

[caption id="attachment_612834" align="aligncenter" width="400"] Pixabay/Public Domain[/caption]

In Q1 2020, the number of bullish hedge fund positions on MarketAxess Holdings Inc (NASDAQ:MKTX) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that MarketAxess Holdings Inc (NASDAQ:MKTX) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:


Disclosure: None. This article is originally published at Insider Monkey.