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4 Reasons to Invest in Interactive Brokers (IBKR) Stock Now
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The investment management industry seems to be well positioned for growth, given the stabilizing economy and improving rate environment. Hence, it is a wise idea to add a stock from the industry to your portfolio now.
Of the many options available, Interactive Brokers Group, Inc. (IBKR - Free Report) seems to be an attractive pick right now, given its strong fundamentals and solid growth prospects.
The company’s price performance seems impressive. Its shares gained 95.4% in the past year, outperforming the industry’s rally of 25.3%.
Moreover, its Zacks Consensus Estimate for the current-year earnings has been revised nearly 1% upward over the past 60 days, reflecting analysts’ optimism about its earnings growth prospects. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Given the positive estimate revisions and solid Zacks Rank, the stock is expected to gain further.
Other factors that make Interactive Brokers an attractive investment option are:
Restructuring Initiatives: Given a low volatile environment and in order to cut losses, Interactive Brokers announced the decision to close down majority of its operations in the Market Making segment and completely wind it up. In sync with this, it sold U.S. options-market-making business (Timber Hill) in October 2017.
Management now plans of focusing solely on strengthening of the Electronic Brokerage segment. These efforts will likely support its financials in the future.
Revenue Strength: Interactive Brokers’ revenues increased at a compound annual growth rate (CAGR) of 12.1% in the last five years (2013-2017). Also, the top line is expected to grow 8.1% and 15.7% in 2018 and 2019, respectively.
Earnings per Share (EPS) Growth: Interactive Brokers witnessed EPS growth of 15.3% in the last three to five years, higher than the industry average of 10.4%. The trend is expected to continue in the near term. Its earnings are projected to grow 37.3% and 19.1% in 2018 and 2019, respectively.
Further, its long-term (three to five years) expected EPS growth of 10% promises rewards for shareholders.
Strong Leverage: Interactive Brokers doesn’t use debt to finance its operations. On the other hand, the industry’s debt/equity ratio is 0.25. This reflects that the company will be financially stable, even in adverse economic conditions.
In the last 60 days, TD Ameritrade witnessed a 1% upward earnings estimate revision for the current fiscal year. Its share price has increased 55.3% in the past 12 months.
E*TRADE Financial’s shares have surged 61.5% in the past year and its Zacks Consensus Estimate for the current year has been revised 1.2% upward in the last 60 days.
Waddell & Reed’s earnings estimates have been revised 2.3% upward for the current year over the last 60 days. Also, its shares have gained around 19.1% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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4 Reasons to Invest in Interactive Brokers (IBKR) Stock Now
The investment management industry seems to be well positioned for growth, given the stabilizing economy and improving rate environment. Hence, it is a wise idea to add a stock from the industry to your portfolio now.
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Of the many options available, Interactive Brokers Group, Inc. (IBKR - Free Report) seems to be an attractive pick right now, given its strong fundamentals and solid growth prospects.
The company’s price performance seems impressive. Its shares gained 95.4% in the past year, outperforming the industry’s rally of 25.3%.
Moreover, its Zacks Consensus Estimate for the current-year earnings has been revised nearly 1% upward over the past 60 days, reflecting analysts’ optimism about its earnings growth prospects. Thus, the stock currently carries a Zacks Rank #2 (Buy).
Given the positive estimate revisions and solid Zacks Rank, the stock is expected to gain further.
Other factors that make Interactive Brokers an attractive investment option are:
Restructuring Initiatives: Given a low volatile environment and in order to cut losses, Interactive Brokers announced the decision to close down majority of its operations in the Market Making segment and completely wind it up. In sync with this, it sold U.S. options-market-making business (Timber Hill) in October 2017.
Management now plans of focusing solely on strengthening of the Electronic Brokerage segment. These efforts will likely support its financials in the future.
Revenue Strength: Interactive Brokers’ revenues increased at a compound annual growth rate (CAGR) of 12.1% in the last five years (2013-2017). Also, the top line is expected to grow 8.1% and 15.7% in 2018 and 2019, respectively.
Earnings per Share (EPS) Growth: Interactive Brokers witnessed EPS growth of 15.3% in the last three to five years, higher than the industry average of 10.4%. The trend is expected to continue in the near term. Its earnings are projected to grow 37.3% and 19.1% in 2018 and 2019, respectively.
Further, its long-term (three to five years) expected EPS growth of 10% promises rewards for shareholders.
Strong Leverage: Interactive Brokers doesn’t use debt to finance its operations. On the other hand, the industry’s debt/equity ratio is 0.25. This reflects that the company will be financially stable, even in adverse economic conditions.
Other Stocks to Consider
A few other stocks in the finance space worth considering are TD Ameritrade Holding Corporation (AMTD - Free Report) , E*TRADE Financial Corporation and Waddell & Reed Financial, Inc. , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last 60 days, TD Ameritrade witnessed a 1% upward earnings estimate revision for the current fiscal year. Its share price has increased 55.3% in the past 12 months.
E*TRADE Financial’s shares have surged 61.5% in the past year and its Zacks Consensus Estimate for the current year has been revised 1.2% upward in the last 60 days.
Waddell & Reed’s earnings estimates have been revised 2.3% upward for the current year over the last 60 days. Also, its shares have gained around 19.1% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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