Finance stock Tradeweb Markets (TW) is known for offering the best of two worlds: by scoring solid gains but with lower volatility. Now the Big Cap 20 stock is getting a lift from the rally following the election of Donald Trump.
Sellers drove Tradeweb stock lower after it reported third-quarter earnings on Oct. 30, but shares quickly found their feet at an important level of support. Shares then headed higher and formed a flat base.
Tradeweb rebounded from its 50-day moving average as the Trump rally pushed the stock market into high gear on Nov. 6. It then went on a five-day winning streak to break out and touch an all-time high on Wednesday. Shares poked into the buy zone that goes up to 142.94 from an entry point of 136.13, but pulled back on Thursday.
Still, the second-stage flat base also shows that the rally may be in its early innings.
Finance Stock Falls On Results, But Not For Long
Third-quarter results weighed on Tradeweb, but not for long. The financial services company saw sales rise 37% to $448.9 million with earnings per share of 75 cents, which were 36% higher.
The report said the company was able to increase revenue despite volatile rates and an uncertain economic backdrop by working closely with clients. As a result, average daily volume rose 55% from the prior year to $2.2 trillion.
Since its September-quarter report, average daily volume has continued to increase. In October, it rose 34.1% to $2.35 trillion while total trading volume was $54.7 trillion.
The company has been making a push to acquire other players. In August, it bought Institutional Cash Distributors which specializes in U.S. money market funds and other short-term investments.
It also bought Yieldbroker, a trading platform for Australian and New Zealand government bonds. In January, it acquired r8fin and its tools for trading U.S. Treasury bonds.
Bullish Signals On Tradeweb Markets Chart
Tradeweb has other bullish chart signals going for it. Besides the rising 50-day moving average, the green earnings line on IBD MarketSurge’s weekly chart shows steady earnings growth and is trending higher as well.
Earnings growth has accelerated over the past two quarters and ranged between 11% and 36% over a longer, eight-quarter period. That is helping it score a high Earnings Per Share Rating of 98 out of a best possible 99 in Investor’s Business Daily’s rankings.
Analysts also expect rising profits to boost earnings in 2024 and 2025. In 2024, they see profits rising 28% with earnings of $2.90 a share. Profits are expect to rise again by 14% in 2025 with earnings of $3.32 a share.
The finance stock has done better than 85% of other stocks in the IBD database over the past 52 weeks.
The stock’s all-around performance is top-notch and accounts for an ideal Composite Rating of 99.
First Place In A Highly Ranked Group
The stock also holds first place in a high-ranking group, according to IBD Stock CheckUp. TradeWeb is in the specialty financial services group which holds 7th place among 197 industry groups in the IBD database.
Tradeweb provides a marketplace for trading stocks, bonds and money market securities.
The company’s initial public offering took place in April 2019 with shares at $27 a piece. As of Wednesday’s closing price, the stock had gained 400% since it started trading.
More funds have been net buyers of the stock in five out of the past seven quarters. The Artisan Midcap Fund (ARTMX) and the Allspring Growth Fund (SGRAX) are among those holding shares of Tradeweb Markets.
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