Omaha, NE-based online brokerage firm, TD Ameritrade Holding Corporation AMTD came up with average client trades per day of 521,000 in its activity report for Jan 2017. While the reported figure increased 8% from the prior month, it decreased 8% compared with the year-ago period.
Broker performance is generally measured through monthly average client trades per day. This represents the number of trades from which brokers earn commissions or fees.
As of Jan 31, 2017, TD Ameritrade reported $815 billion in total client assets, up 2% from the prior month and 22% year over year. Average fee-based balances were $176.4 billion, up 2% from the prior month and 16% from the prior-year period. Average spread-based balances of $120.1 billion was stable compared with the prior month, but was up 14% year over year.
Further, the Zacks Consensus Estimate for fiscal 2017 moved up 5.5% to $1.74, over the last 60 days. In addition, TD Ameritrade shares have gained around 65.9% over the last one-year period, as against 71.7% gain in the Zacks categorized Investment Bank industry.
Improved Quarterly Performance
During first-quarter fiscal 2017 (ended Dec 31), average client trades per day for the reported quarter climbed 11% year over year to 487,000.
As of Dec 31, 2016, net new client assets totaled $18.7 billion, up 6.9% year over year. Total client assets came in at $797 billion, up 15% year over year.
Average spread-based balance was $117.7 billion, jumping 14.8% year over year and average fee-based investment balance was up 7.4%, to $170.4 billion.
TD Ameritrade Poised for Growth
Innovations in online trading, long-term investment in products and services, delivery of advanced customer service and creative marketing and sales are TD Ameritrade’s key strategies for boosting the trading and investing business.
Further, the company’s association with The Toronto-Dominion Bank TD provides an opportunity to cross sell its products. This is expected to significantly drive organic growth. Also, its latest deal in Oct 2016, to acquire Scottrade, is likely to be accretive to EPS in double-digit figure. The deal is also anticipated to drive annual expense savings of $450 million, with additional $300 million of savings over the long run.
However, we remain cautious as a persistent rise in expenses and stringent regulations may weigh on the company’s financials in the upcoming quarters.
At present, TD Ameritrade carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other investment brokers, Interactive Brokers Group, Inc.’s IBKR Electronic Brokerage segment reported total client Daily Average Revenue Trades of 646,000 for Jan 2017, reflecting a plunge of 22% from Jan 2015, and increased 9% from Dec 2016. Total customer accounts were 391,000, up 17% from the prior-year month and 2% from the preceding month.
The Charles Schwab Corporation SCHW is expected to report its monthly metrics earlier next week.
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