Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success. One of our most popular services, Zacks Premium offers daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All are useful tools to find what stocks to buy, what to sell, and what are today's hottest industries. It ...

Paul Zimmerman/Getty Images Entertainment Since my last Virtu Financial (NASDAQ:VIRT) article, the stock is up 65% while the S&P 500 returned 14%. It is one of my worst-performing articles in terms of readers on Seeking Alpha, but one of my best-performing stocks since publication. There is a lot of alpha in identifying high-quality stocks that are undervalued, especially if no one else is looking. The thesis remains largely the same, a sophisticated hedge focused on Virtu's ability to take advantage of vol ...

Virtu Financial, Inc. (VIRT) , a leading financial services company, is well-poised to grow on the back of its diversified business and rising interest and dividends income. Headquartered in New York, Virtu Financial has a market cap of $4.8 billion. Strong revenue contribution from the Market Making segment due to higher trading income will likely benefit the stock. We expect its capture rate from the unit to improve in the coming days, along with a decline in costs. Courtesy of solid prospects, this Zacks ...

Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success. One of our most popular services, Zacks Premium offers daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All are useful tools to find what stocks to buy, what to sell, and what are today's hottest industries. Al ...

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both. The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor. Zacks Premium includes access to the Zacks Style ...

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both. The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor. Zacks Premium includes access to the Zacks Style Scores as well. What are the Zacks Style S ...

H Vertigo3d I often look for low-beta stocks to add to my portfolio to be more resilient to market volatility. But it is not easy to find stocks that are not only low-beta but also highquality growth names, akin to having the cake and eating it too. Virtu Financial (NASDAQ:VIRT) is among the rare breed of names that can fit this profile. I own shares in the company, and I can distill the reasons for this below: Volatile markets benefit the company, which makes it anti-fragile. Low beta name (2Y Beta of 0.5) ...

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both. The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor. It also includes access to the Zacks Style Scores ...

Financial Performance and Revenue Growth - Total revenue for the six months ended June 30, 2024, was $1,335.8 million, a 18.5% increase from $1,127.2 million in the same period in 2023[337] - Net income for the six months ended June 30, 2024, was $239.4 million, a 71.5% increase from $139.6 million in the same period in 2023[337] - Trading income, net, accounted for 62% of total revenues for the six months ended June 30, 2024, compared to 64% in the same period in 2023[340] - Adjusted Net Trading Income increased by 15.4% to $751.953 million for the six months ended June 30, 2024, compared to $651.763 million for the same period in 2023[371][373] - Market Making segment's Adjusted Net Trading Income grew by 18.7% to $559.242 million for the six months ended June 30, 2024, compared to $471.050 million in 2023[373] - Execution Services segment's Adjusted Net Trading Income increased by 6.6% to $192.711 million for the six months ended June 30, 2024, compared to $180.713 million in 2023[373] - Average Daily Adjusted Net Trading Income rose by 15.1% to $6.064 million for the six months ended June 30, 2024, compared to $5.256 million in 2023[373] - Trading income, net increased by 16.1% to $834.5 million for the six months ended June 30, 2024, compared to $718.7 million in 2023[369] - Total revenues increased by $186.1 million, or 36.7%, to $693.0 million for the three months ended June 30, 2024, compared to $506.9 million for the same period in 2023[374] - Trading income, net increased by $120.2 million, or 39.3%, to $426.4 million for the three months ended June 30, 2024, driven by higher trading volumes and global market opportunities[376] - Adjusted Net Trading Income increased by $106.4 million, or 38.2%, to $385.1 million for the three months ended June 30, 2024, compared to $278.7 million for the same period in 2023[392] - Commissions, net and technology services revenues increased by $16.6 million, or 15.2%, to $126.1 million for the three months ended June 30, 2024, driven by higher client volumes and institutional engagement[390] - Brokerage, exchange, clearance fees and payments for order flow, net increased by $28.3 million, or 23.1%, to $150.8 million for the three months ended June 30, 2024[393] - Total revenues increased by $208.6 million, or 18.5%, to $1,335.8 million for the six months ended June 30, 2024, compared to $1,127.2 million for the same period in 2023[399] - Market Making segment revenues increased by 20.6% to $1,090.8 million for the six months ended June 30, 2024, driven by a 15.9% increase in trading income and an 18.7% increase in interest and dividends income[400] - Execution Services segment revenues increased by 7.6% to $244.8 million for the six months ended June 30, 2024, primarily due to a 33.6% increase in trading income[400] - Interest and dividends income increased by 18.3% to $213.1 million for the six months ended June 30, 2024, driven by higher interest rates and increased dividends on market making trading assets[401] - Other, net increased by 1,776.9% to $43.6 million for the six months ended June 30, 2024, primarily due to gains on settlement fund recoveries[402] - Adjusted Net Trading Income, a non-GAAP measure, increased by 15.4% to $752.0 million for the six months ended June 30, 2024, driven by higher trading income and other, net[421] Expenses and Costs - Employee compensation and payroll taxes for the six months ended June 30, 2024, were $206.5 million, a 3.8% increase from $199.0 million in the same period in 2023[337] - Interest and dividends income for the six months ended June 30, 2024, was $213.1 million, an 18.2% increase from $180.2 million in the same period in 2023[337] - Depreciation and amortization expenses for the six months ended June 30, 2024, were $32.2 million, a 2.9% increase from $31.3 million in the same period in 2023[337] - Communication and data processing expense increased by 3.3% to $117.5 million for the six months ended June 30, 2024, compared to $113.8 million in 2023[370] - Employee compensation and payroll taxes increased by $10.1 million, or 10.6%, to $105.7 million for the three months ended June 30, 2024[394] - Interest and dividends expense increased by $11.2 million, or 10.0%, to $123.7 million for the three months ended June 30, 2024[395] - Communication and data processing expense increased by $2.3 million, or 4.0%, to $59.3 million for the three months ended June 30, 2024[378] - Debt issue cost related to debt refinancing, prepayment, and commitment fees increased to $24.3 million for the three months ended June 30, 2024[397] - Operating expenses increased by 8.7% to $1,040.6 million for the six months ended June 30, 2024, driven by higher brokerage, exchange, clearance fees, and interest and dividends expense[403] - Employee compensation and payroll taxes increased by 3.8% to $206.5 million for the six months ended June 30, 2024, primarily due to higher accrued incentive compensation[423] - Interest and dividends expense increased by 18.8% to $249.7 million for the six months ended June 30, 2024, driven by higher interest rates and increased securities lending transactions[424] - Provision for income taxes increased to $55.8 million for the six months ended June 30, 2024, with an effective tax rate of 18.9%, compared to $30.6 million and 18.0% for the same period in 2023[428] Cash and Liquidity Management - As of June 30, 2024, the company had $25.4 million in cash in special reserve bank accounts for customer benefits and $6.2 million in reserve bank accounts for proprietary accounts of brokers[296] - Cash and cash equivalents as of June 30, 2024, totaled $684.8 million, primarily for operating activities, capital expenditures, and liquidity needs[429] - Borrowings under prime brokerage credit facilities were $119.3 million, broker-dealer facilities $75.0 million, and long-term debt $1,766.8 million as of June 30, 2024[429] - The company anticipates increased cash and liquidity needs due to margin requirements from expanded trading activities in existing and new markets[431] - Net cash provided by operating activities was $95.4 million for the six months ended June 30, 2024, compared to a net cash used of $26.4 million in the same period of 2023[450] - Net cash used in financing activities was $194.7 million for the six months ended June 30, 2024, primarily due to $160.7 million in dividends and $82.9 million in treasury stock purchases[452] - Outstanding principal balance on broker-dealer facilities is $75.0 million, and short-term credit facilities with prime brokers and financial institutions total approximately $119.3 million as of June 30, 2024[459] - The company has $1,245.0 million outstanding under term loans as of June 30, 2024, and is in compliance with all applicable covenants under the Credit Agreement[462] Debt and Financing Activities - The company completed the acquisition of Investment Technology Group, Inc. (ITG) for $1,500.0 million, with $404.5 million used to repay previous term loans and $1,095.0 million to finance the acquisition[314] - On June 21, 2024, the company issued $500.0 million in 7.50% senior secured first lien notes due 2031, with interest payable semi-annually[315] - The company entered into Amendment No. 1 to the Credit Agreement, issuing $1,245.0 million in Senior Secured First Lien Term B-1 Loans due 2031 and increasing the revolving credit facility from $250.0 million to $300.0 million[332] - The company entered into a $1,800.0 million senior secured first lien term loan and a $250.0 million revolving facility on January 13, 2022[435] - In December 2023, the company terminated two interest rate swaps, receiving $55.8 million, and entered into a new $1,525.0 million swap agreement[439] - On June 21, 2024, the company issued $1,245.0 million in New Term Loans and increased its revolving credit facility to $300.0 million[440] - The company completed the offering of $500.0 million in 7.50% senior secured first lien notes due 2031 on June 21, 2024[444] - The company entered into two interest rate swap agreements totaling $1,525.0 million, with effective fixed interest payment obligations at rates of 4.5% and 4.6% through September 2024 and January 2025, respectively[461] - The company may redeem up to 10% of the aggregate original principal amount of notes annually at a redemption price of 103% of the principal amount plus accrued interest[466] - The company's revolving facility under the Credit Agreement is subject to a springing net first lien leverage ratio, which may trigger contingent principal prepayments based on excess cash flow and other events[460] Regulatory and Compliance - The company's regulatory capital in Canada, Ireland, the UK, and Asia Pacific regions as of December 31, 2023, showed significant excess regulatory capital, with Virtu Financial Singapore Pte. Ltd. having the highest excess at $52.615 million[298] - Regulatory capital requirements are imposed by SEC, FINRA, NYSE, and other international regulators, with potential sanctions for non-compliance[432][433] - The company's U.S. subsidiary, Virtu Americas LLC, is subject to regulation and capital requirements by the SEC and FINRA, and RFQ-hub Americas LLC became a registered U.S. broker-dealer in June 2023[457] Technology and Operations - The company's proprietary technology platform is highly reliable, scalable, and modular, enabling global market making and execution services across multiple asset classes without significant incremental costs[289] - The company's Market Making segment is significantly impacted by market volatility, which can increase bid/ask spreads and capture rates per notional amount transacted[291] - The Execution Services segment earns commissions through client-based trading, proprietary technology services, and trading analytics, including portfolio management and securities valuation tools[292][301] - The company's Corporate segment includes investments in strategic financial services opportunities and manages corporate overhead expenses[293] - The company's workflow technology revenues include order and trade execution management, order routing services, and commission share arrangements with third-party brokers[476][477] - The company's commission management program allows institutional clients to allocate gross commissions for research and other services, recorded on a net basis within Commissions, net[475] Dividends and Shareholder Returns - The company declared a dividend of $0.24 per share of Class A and Class B Common Stock, payable on September 15, 2024, to holders of record as of September 1, 2024[306] - The share repurchase program was expanded to $1,720 million and extended through April 24, 2026[470] Tax and Legal Matters - The company's effective tax rate was 17.6% for the three months ended June 30, 2024, compared to 16.7% for the same period in 2023[364] - The company made tax receivable payments totaling $114.0 million from February 2017 through March 2024, with expected annual payments ranging from $0.1 million to $22.0 million over the next 15 years[360] - The company is required to make payments equal to 85% of applicable cash tax savings to certain equity holders under tax receivable agreements, with tax attributes generally realized over 15 years[483] Strategic Investments and Acquisitions - The company completed the acquisition of Investment Technology Group, Inc. (ITG) for $1,500.0 million, with $404.5 million used to repay previous term loans and $1,095.0 million to finance the acquisition[314] - The company's Amended and Restated 2015 Management Incentive Plan was amended to increase the number of shares of Class A Common Stock reserved for issuance from 16,000,000 to 26,000,000[333] Market and Economic Risks - The company's forward-looking statements highlight risks such as regulatory changes, market volatility, and competition, which could impact future financial performance[286][287][308] Other Financial Metrics - Other, net increased by $40.2 million to $33.4 million for the three months ended June 30, 2024, compared to $(6.8) million for the same period in 2023[363] - The company has two secured credit facilities with borrowing limits of $400 million (Uncommitted Facility) and $650 million (Committed Facility) to finance overnight securities positions[361]

Virtu Financial (VIRT) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company. The upward trend in estimate revisions for this high-speed trading company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation betw ...