Shares of E*TRADE Financial Corporation (ETFC) crafted a new 52-week high, touching $21.80 in the last hour of the trading session on Feb 13. The closing price of this investment brokerage firm represents a return of 92.8% in a year’s time. The trading volume for the session was around 4.4 million shares.
Despite hitting its 52-week high, this Zacks Rank #2 (Buy) stock has plenty of upside left, given its strong estimate revisions over the last 30 days.
Growth Drivers
Impressive fourth-quarter 2014 results, including an improvement in daily average revenue trades (DARTs) and lower provisions, as well as a strong capital position were the primary growth drivers for E*TRADE Financial.
On Jan 23, E*TRADE Financial reported fourth-quarter 2013 earnings of 20 cents per share, in line with the Zacks Consensus Estimate. Results improved significantly from a net loss of 65 cents per share in the prior-year quarter. Moreover, for 2013, excluding the impact of non-recurring items, earnings per share of 70 cents came in well ahead of the prior-year loss of 39 cents.
Further, driven by a strong equity market, DARTs for the full year increased 9.4% year over year while it was up 25% sequentially. E*TRADE Financial also witnessed a substantial rise in its net new brokerage accounts. However, on the flip side, core operating expenses increased 3.1% year over year and net operating interest income decreased 1.2% in the reported quarter.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for fiscal 2014 advanced 3.4% to 90 cents per share, while for fiscal 2015 it moved north 5.5% to $1.14 per share.
Other Investment Brokerage firms worth considering include Investment Technology Group Inc. (ITG), LPL Financial Holdings Inc. (LPLA) and The Goldman Sachs Group, Inc. (GS). Both Investment Technology Group and LPL Financial carry a Zacks Rank #1 (Strong Buy) while Goldman holds a Zacks Rank #2 (Buy).
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