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TD Ameritrade's (AMTD) Client Trades Rise 23% in November
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Omaha, NE-based online brokerage firm, TD Ameritrade Holding Corporation (AMTD - Free Report) reported average client trades of 540,000 per day in its activity report for Nov 2016. This was up 23% from the prior-year period as well as the previous month.
Broker performance is usually measured through monthly average client trades per day. This represents the number of trades from which brokers earn commissions or fees.
As of Nov 30, 2016, TD Ameritrade reported $782.2 billion in total client assets, up 11% from the year-ago period and 2% from the preceding month. Average spread-based balance of $118.3 billion displayed an increase of 16% year over year and 3% from the prior-month figure.
Further, average fee-based balances were $169.1 billion, up 5% from the prior-year period and flat from the preceding month.
With such positive results, investors’ optimism was also visible on the stock. Shares rose more than 24% year-to-date.
Mixed Quarterly Performance
During fourth-quarter fiscal 2016 (ended Sep 30), average client trades per day decreased 7.2% year over year to 444,281. At the end of the quarter, net new client assets totaled $15.1 billion, down 6.8% year over year.
However, total client assets came at $773.8 billion, up 15.9% year over year. While average spread-based balance was $110.9 billion, up 11.1% year over year, average fee-based investment balance was up 7.6% to $169 billion.
Our Viewpoint
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 to boost its trading and investment business. Further, we believe that the company will benefit from the renewed interest of retail investors in the equity market.
Further, the company’s association with The Toronto-Dominion Bank (TD - Free Report) provides an opportunity to cross sell its products. This is anticipated to significantly drive organic growth.
Amid a volatile operating environment, TD Ameritrade witnessed a continuous rise in organic client assets, which augurs well for the future. However, we remain cautious as a persistent rise in expenses, margin pressure and stringent regulations may weigh on the company’s financials in the upcoming quarters.
Among other investment brokers, Interactive Brokers Group, Inc.’s (IBKR - Free Report) Electronic Brokerage segment reported a rise in Daily Average Revenue Trades (DARTs) for Nov 2016. Total client DARTs were 728,000, up 14% from Nov 2015 and 21% from Oct 2016. Also, total customer accounts were 380,100, up 15% year over year and 1% from the prior month.
The Charles Schwab Corp. (SCHW - Free Report) is expected to report its monthly metrics later this week.
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TD Ameritrade's (AMTD) Client Trades Rise 23% in November
Omaha, NE-based online brokerage firm, TD Ameritrade Holding Corporation (AMTD - Free Report) reported average client trades of 540,000 per day in its activity report for Nov 2016. This was up 23% from the prior-year period as well as the previous month.
Broker performance is usually measured through monthly average client trades per day. This represents the number of trades from which brokers earn commissions or fees.
As of Nov 30, 2016, TD Ameritrade reported $782.2 billion in total client assets, up 11% from the year-ago period and 2% from the preceding month. Average spread-based balance of $118.3 billion displayed an increase of 16% year over year and 3% from the prior-month figure.
Further, average fee-based balances were $169.1 billion, up 5% from the prior-year period and flat from the preceding month.
With such positive results, investors’ optimism was also visible on the stock. Shares rose more than 24% year-to-date.
Mixed Quarterly Performance
During fourth-quarter fiscal 2016 (ended Sep 30), average client trades per day decreased 7.2% year over year to 444,281. At the end of the quarter, net new client assets totaled $15.1 billion, down 6.8% year over year.
However, total client assets came at $773.8 billion, up 15.9% year over year. While average spread-based balance was $110.9 billion, up 11.1% year over year, average fee-based investment balance was up 7.6% to $169 billion.
Our Viewpoint
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 to boost its trading and investment business. Further, we believe that the company will benefit from the renewed interest of retail investors in the equity market.
Further, the company’s association with The Toronto-Dominion Bank (TD - Free Report) provides an opportunity to cross sell its products. This is anticipated to significantly drive organic growth.
Amid a volatile operating environment, TD Ameritrade witnessed a continuous rise in organic client assets, which augurs well for the future. However, we remain cautious as a persistent rise in expenses, margin pressure and stringent regulations may weigh on the company’s financials in the upcoming quarters.
At present, TD Ameritrade carries a Zacks Rank #3 (Hold). 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 - Free Report) Electronic Brokerage segment reported a rise in Daily Average Revenue Trades (DARTs) for Nov 2016. Total client DARTs were 728,000, up 14% from Nov 2015 and 21% from Oct 2016. Also, total customer accounts were 380,100, up 15% year over year and 1% from the prior month.
The Charles Schwab Corp. (SCHW - Free Report) is expected to report its monthly metrics later this week.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>