Interactive Brokers Group, Inc.

Interactive Brokers Group, Inc. (IBKR - Analyst Report) pre-reported very strong first-quarter results in late September that were ahead of analyst estimates. The company is also sitting on $4 billion of equity capital and intends to initiate a share buyback program.

Company Description

Interactive Brokers Group, Inc. is an automated electronic broker that provides execution and processing services for its customers. The company was founded in 1977, has a market cap of $929 million and is based in Greenwich, Connecticut.

First-Quarter Earnings

Interactive Brokers is scheduled to officially release its first-quarter results on Oct 22, but went ahead pre-released on Sep 30 to calm its investors in a volatile market.

Revenue is projected to land between $325 and $375 million. Earnings are expected to total between 55 and 65 cents per share, ahead of analyst estimates of 48 cents per share.

Share Buyback

The company also said that it believes the recent market volatility has "unduly depressed" its stock price, and intends to initiate a share repurchase program. The Board of Directors has approved a buyback of up to 8 million shares.

Strong Equity Capital Position

At a time when cash is king and credit is both expensive and difficult to secure, Interactive Brokers is in the very favorable position of carrying $4 billion in equity capital to fund new initiatives.

Chairman and CEO Thomas Peterffy noted that "IBG LLC has more than $4 billion of equity capital and does not rely on outside liquidity to any meaningful extent and is therefore relatively unaffected by recent events."

Analyst Estimates

Analysts continue to be bullish on Interactive Brokers, with the current-year estimate climbing to $2.15 per share from $2.01 30 days ago. The next-year estimates stands at $2.30 per share, a 7% earnings growth projection.

Based upon the current-year estimate, this stock has a forward P/E multiple of 10.5X, a slight discount to the overall market.

The Chart

This stock has recently rebounded from its short-term low just below $20, jumping up to the $20 level. This stock is not racing higher, but Interactive Brokers is a company that is growing its earnings while most companies are contracting. This bodes well for the longer-term performance of its share price. Take a look at the chart.