Virtu Financial Makes Markets & Adds Liquidity

The financial services sector includes nineteen industries all related to managing money: asset management; banks either global or from any of seven regions, capital markets, credit services, financial exchanges, insurance in six specializations, savings banks, and specialty finance.

Today I'm reviewing a mid-cap US capital markets firm.

It's name is Virtu Financial Inc.

It's trading ticker symbol is VIRT.  

Virtu Financial Inc. is a leading technology-enabled market maker and liquidity provider to the global financial markets. It maintains a technology platform which provides quotations to buyers and sellers of various securities.

The company's Market Making segment principally works in the cash, futures, and options markets across equities, options, fixed income, currencies, and commodities. 

Its Execution Services provides agency-based trading and trading venues in equities, ETFs, futures, and fixed income to institutions, banks, and broker-dealers. 

Virtu Financial, Inc. was founded in 2008 and is headquartered in New York, New York.

I use three key data points to gauge the value of any dividend equity or fund like Virtu Financial Inc.:

(1) Price

(2) Dividends

(3) Returns

After those three, four more keys will finally unlock an equity or fund in which to invest. 

No matter what, it's the first three primary traits that best tell whether a company has made, is making, and will make money. 

VIRT Price

Virtu's price was $29.75 per share at yesterday's market close. A year ago its price was $17.40 for a gain of $12.35 per share in the past year.  

Assuming Virtu's price will continue to trade in the range of $16.00 to $45.00 next year, its price could grow another $12.35 from $29.75 to $42.10 by June 22, 2019. 

VIRT Dividends

Virtu's most recently declared quarterly dividend was $0.24 per share paid June 15. That $0.24 quarterly dividend equates to an estimated annual payout of $0.96 per share for 2018-19 which yields 3.23% at yesterday's $29.75 closing stock price.  

Gains For VIRT?

Virtu's $12.35 estimated year over year price gain plus an anticipated dividend of  $0.96 makes a projected gross annual gain of $13.31 per share, which will be reduced by the costs to trade those shares.  

A little over $1,000.00 invested today at the $29.75 price buys 34 shares. 

A $10 broker fee paid half at purchase and half at sale subtracts $0.29 per share.

Taking that $0.29 brokerage cost out of the estimated $13.31 gross gain per share leaves a net gain of $13.02 X 34 shares 

= $442.68

or a 44.25% potential net gain on a $1,011.50 investment.

Therefore, Virtu Financial Inc., now shows a possible 44.25% net gain including a 3.23% dividend yield. 

Seven analysts cover this stock:

Three say "buy" VIRT.

Four say "hold' VIRT shares.

Their seven analyst consensus recommendation is 2.1 or "outperform" and their price target is  $36 or $7.10 under my $42.10 year over year target.

Y Charts rates VIRT "neutral" for an overall "Y" rating. Y Charts also shows "good" for a Value score of 8 out of ten points. And YCharts ranks VIRT "average" with 5 out of 10 possible Fundamental points. Y Charts Historic Valuation score for VIRT is 23.32% overvalued at a $24.12 historic valuation.

You could look at all those numbers like this: Virtu Financial Inc. has made money, is making money, and could net a 30% to 42% net  gain next year including a 3.23% annual dividend yield paid out quarterly. It could be more, it could be less.

The above speculation is conjecture based on past year performance. Actual results remain to be seen. They could turn out to be far higher or lower. More study is required for you to determine if Virtu Financial Inc. is worth your time and money.

Disclaimer: For more information and to get a two-week free sample of my stock portfolios just click on this link. Click ...

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