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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Patherzen who wrote (1824)	6/25/1999 10:53:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 10027

What do you think?....Thank you, and good Knight(/Trimark) By Jeff Clabaugh Last Update: 10:26 AM ET Jun 25, 1999 NewsWatch Your online broker isn't the only one pocketing a little money when you make a trade. There's another layer between you and the stock you're trying to buy or sell. It's called the market maker, and some investors have figured out who the silent partner in online trading is. Knight/Trimark (NITE: news, msgs) has consistently been showing up among the Dells and Compaqs and Lucents that usually dominate the most actives list. Knight/Trimark is a market maker -- when you place an order at an online broker, the broker passes the order on to a market maker like Knight which buys and sells the securities. Knight specializes in Nasdaq stocks, but also trades stocks from the NYSE and American Stock Exchanges in the over-the-counter market. At Morningstar's website, Haywood Kelly profiles Knight in the latest Stock Analyst's journal and he says the company has leapfrogged other market makers to take the number one market share in Nasdaq stocks, capturing about 16 percent of the trades. Knight has piggybacked on the growth in online brokerages with its five biggest customers being Ameritrade, Brown & Co., Discover Brokerage Direct, E*Trade and Waterhouse. There's one big name missing from that list. The number one online broker, Schwab, has its own in-house market maker. But Knight's bottom line hasn't suffered for the want of Schwab's business. Kelly says Knight's revenues have risen at an annualized pace of 72 percent over the past three years. And the greater the volume, the more Knight earns on the spread between the price it sells securities and the price it pays for them. Morningstar gives Knight an "A" grade for growth, profitability and financial health, but the company's report card isn't perfect. Trouble is, the stock may be way overvalued. It gets a "D" grading from Morningstar for valuation. Knight's market value is now $6 billion, even though its yearly sales are around $500 million and its price to sales ratio of 12 is considered steep even for a fast growing company. Knight's stock return to investors has been 600 percent over the past six months but with the pounding Internet stocks have taken lately, Knight has dropped sharply from its 52 week high. Morningstar calls Knight a speculative investment but does say if the long-term trend is toward more use of online brokers and higher trading volumes, the company will almost certainly continue to benefit. Read the full story