I would be interested if anyone follows and has a view on this company. I am struggling to come up with a fair value. All valuation ratios look very high but the company is extremely successful.

The difficulties are what to enter as the true growth rate and what to enter now as FCF (my preferred ratio constituent). FCF looks to have suddenly reduced, making what were previously attractive valuation ratios based on FCF unattractive.

I have a holding in MKTX.

I have owned MKTX for several years. It does look expensive by the usual P/E, etc valuation metrics. But the network effect they are developing is incredibly powerful, and consensus estimates for coming years do not reflect this IMO. People far too often call a company “the next ……”, but in this case I believe it is apt to call MKTX the FB for bond traders. They are taking market share in a large and growing space. Most recent FCF down as they are purposely boosting expenses now to build for future growth.

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Thank you bobloblaw for that encouraging answer.

I wonder what you might enter as a stab at the growth rate. For ‘growth rate’, other things being equal I use two spoons of sales to one of earnings, i.e. growth rate = (sales growth one year x 2 + EPSGR one year)/3.

On the general valuation, I can make MKTX work, but only if FCF returns to average and growth is ~ 20.

I see MS has fair value at $100!

N/E director sale in April, 15%.