TD Ameritrade's January DARTs Rise - Analyst Blog
February 12 2013 - 6:20AM
Zacks
TD Ameritrade Holding Corporation (AMTD) – an
online brokerage firm – reported a 17% increase in average U.S.
trades in its Activity Report for the month of Jan 2013. On a
year-over-year basis, the U.S. trades were up 3%.
For the reported month, Daily Average Revenue Trades (DARTs) were
387,000 compared with 331,000 recorded in the prior month. The rise
in DARTs primarily resulted from the improvement in the equity
markets.
Broker performance is generally measured through DARTs that
represent the number of trades, from which brokers can commissions
or fees.
TD Ameritrade reported $499.3 billion in total client assets in
January, up 17% year over year and 4% from the prior month.
Moreover, average spread-based balances augmented 12% year over
year to $83.4 billion. Further, these balances scaled up 3% from
Dec 2012.
At the end of January, average fee-based balances stood at $107.8
billion, up 32% year over year and 5% from the last month.
Quarterly Performance
As of Dec 31, 2012, DARTs decreased 9% year over year to 334,035.
Net new client assets reported were $15.6 billion, up 53% from
$10.2 billion a year ago.
For the quarter, TD Ameritrade reported $480.8 billion in total
client assets, up 18% year over year. Moreover, average
spread-based balance was $79.3 billion, up 9% from $72.6 billion in
the prior-year quarter. Average fee-based balances surged 28% year
over year to $100 billion.
Our Viewpoint
The competitive position of brokerage business in the market
depends on trading customers, with emphasis on active traders. As
the long-term investing customer group is less developed compared
to trading customers, there is an opportunity for future growth in
case the long-term customer base expands.
Development of innovative ways for online trading and long-term
investing products and services, delivery of advanced customer
service, creative and cost-effective marketing and sales, as well
as expense discipline can be considered as the key factors behind
TD Ameritrade’s strategy of boosting its trading and investing
business.
Amidst a volatile operating environment, TD Ameritrade witnessed a
decline in organic client asset. The company also reported waning
trading volumes, and therefore a significant turnaround remains
elusive. Further, a low interest rate environment is a matter of
concern.
TD Ameritrade currently retains a Zacks Rank #2 (Buy). Other
brokerage firms that are also performing well include
Evercore Partners Inc. (EVR), Greenhill
& Co., Inc. (GHL) and Piper Jaffray
Companies (PJC). All these stocks carry a Zacks Rank #1
(Strong Buy).
TD AMERITRADE (AMTD): Free Stock Analysis Report
EVERCORE PARTNR (EVR): Free Stock Analysis Report
GREENHILL & CO (GHL): Free Stock Analysis Report
PIPER JAFFRAY (PJC): Free Stock Analysis Report
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