Interactive's Nov. Metrics Mixed

Interactive Brokers Group Inc.’s ( IBKR - Analyst Report ) Electronic Brokerage segment has announced its monthly brokerage data for November 2011. The segment under review clears and settles trades globally for both individual and institutional clients.

Interactive’s total customer accounts for the month of November were 187,700, up 21% from 155,400 in November 2010 and 1% from 185,900 in October 2011. Though total customer Daily Average Revenue Trades (DARTs) rose 16% from the prior-year month, it fell 2% from the prior month to 478,000.

Furthermore, during the month under review, Interactive recorded Cleared Customer DARTs of 442,000 compared with 373,000 in November 2010 and 450,000 in October 2011. However, on an annualized basis, the company reported Cleared Average DART per customer account of 596,000, down from 609,000 in the comparable month last year and 613,000 recorded in the previous month.

Interactive’s total options contracts fell 1% from the prior-year month and 16% from the prior month to 22,544 in November 2011. However, during the reported month, the company’s futures contracts stood at 8,295, up from 7,306 in the year-ago month but down from 8,323 in the previous month.

Interactive also provides period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended November 2011, customer equity stood at $25.4 billion, up 23% year over year and flat sequentially.

Additionally, Interactive’s Electronic Brokerage segment recorded customer margin loan balances of $7.0 billion in the reported month, reflecting an 11% hike from $6.3 billion recorded at November 2010-end and 3% from $6.8 billion reported for October 2011-end. Though customer credit balances of $16.5 billion at November 2011-end were up 24% from $13.3 billion at November 2010 end, it was down 4% from $17.2 billion at October 2011-end.

Though Interactive’s fundamentals remain strong with a liquid balance sheet, sturdy capital base and high barriers to entry, we remain concerned about the Market Making segment’s ability to consistently generate sufficient returns to fund dividend payment. Also, there are concerns looming over Interactive’s dependence on IBG LLC and its wide international exposure.

Currently, Interactive retains a Zacks #2 Rank (a short-term ‘Buy’ rating). Similarly, one of its peers, Knight Capital Group Inc. ( KCG - Snapshot Report ) retains a Zacks # 2 Rank.