This fund manager loves TMX Group

BNN Bloomberg’s Market Call featured Velocity Investment Counsel’s Brianne Gardner on Oct. 31, who highlighted TMX Group (TMX Group Stock Quote, Chart, News, Analysts, Financials TSX:X) as a name she continues to favour, emphasizing the company’s growing data-driven revenue mix and earnings resiliency.

Gardner noted that while TMX is best known for operating the Toronto Stock Exchange and related trading platforms, “it’s not just trading — data and analytics now make up 42% of their total revenue and [are] growing double digits.”

She said this segment helps smooth out cyclical swings in capital markets activity, particularly when new listings slow.

The fund manager pointed to accelerating momentum in derivatives, which delivered 27% year-over-year growth, and highlighted TMX’s healthy balance sheet and reliable dividend. The recent pullback, she added, “wouldn’t be a bad time to be adding,” calling the weakness largely a function of fewer IPOs.

“The strength in the data and the derivatives can keep the earnings picture more stable,” she said, adding the stock ranks nine out of 10 for her team, with “just over 25% upside from here.”

TMX shares have gained 15.13% over the past 12 months and 95.23% over five years. Of the analysts covering the stock, six rate it “Buy,” two “Hold,” and none “Sell,” with a consensus price target of $62.50.

The shares closed Nov. 3 at $51.73.

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