A company fairly valued but with a strong moat
MarketAxxess is one such company. Its technology disrupts the traditional bond trading in the secondary market. It is the first mover to introduce an online platform that links investors with bond traders, similar to online security trading, thus, extending the demand and supply equation globally with ease. The commission it earns from the facilitation of bond trading is a recurring income with ease of scalability without the need to incur more capitals. The first mover advantage is obviously a strong moat as competitors will have to incur huge capital outlay to develop similar trading platform. The growth of institutional investors has been tremendous over the last 10 years and MarketAxxess continue to dominate certain bond trading sectors with huge market shares.
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