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TD Ameritrade Holding Corporation (AMTD - Analyst Report) – an online brokerage firm – reported higher U.S. trades in its Activity Report for the month of Apr 2013. Moreover, on a year-over-year basis, the U.S. trades were up 4%.

Daily Average Revenue Trades (DARTs) were 383,000 compared with 361,000 in the prior month. The rise in DARTs was primarily attributable to higher trading volumes in the equity markets.

Broker performance is generally measured through DARTs from which brokers can earn commissions or fees.

TD Ameritrade reported $524.4 billion in total client assets in April, up 16% year over year and 1% from the prior month. Moreover, average spread-based balances rose 11% year over year to $82.8 billion. Further, it nudged up 0.1% from Mar 2013.

At the end of April, average fee-based balances came in at $116.2 billion, up 31% year over year and 2% from the previous month.

Quarterly Performance

As of Mar 31, 2012, DARTs decreased 2% year over year to 378,096. Net new client assets were $12.9 billion, up 19% from $10.8 billion a year ago.

At the end of the quarter, TD Ameritrade reported $516.8 billion in total client assets, up 14% year over year. Moreover, average spread-based balance was $82.6 billion, up 11% from $74.1 billion in the prior-year quarter. Average fee-based balance was $110.9 billion, up 31% year over year

Our Viewpoint

The competitive position of brokerage business in the market depends on trading customers, especially active traders. As the long-term investing customer group is less developed compared to trading customers, there is an opportunity for future growth when the long-term customer base expands.

Innovations in online trading and long-term investing products and services, delivery of advanced customer service, creative as well as cost-effective marketing and sales, along with expense discipline can be considered as the key factors behind TD Ameritrade’s strategy of boosting its trading and investing business.

Amid a volatile operating environment, TD Ameritrade witnessed a rise in organic client assets. However, the decline in trading volumes is a matter of concern for the company. Further, a low interest rate and stringent regulatory environment are expected to be the dampeners.

TD Ameritrade currently carries a Zacks Rank #3 (Hold). Better performing financial stocks include Invesco Ltd. (IVZ - Analyst Report), Virtus Investment Partners, Inc. (VRTS - Snapshot Report) and LPL Financial Holdings Inc. (LPLA - Snapshot Report), all of which carry a Zacks Rank #1 (Strong Buy).

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