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E*TRADE Financial's July DARTs Solid, New Accounts Up Y/Y

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E*TRADE Financial has reported a rise in Daily Average Revenue Trades (DARTs) for July. According to its monthly-market activity, the company’s DARTs came in at 1,014,000, down 27.2% from the previous month but more than 200% up on a year-over-year basis. Notably, derivatives comprised 27% of DARTs in the reported month.

Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees. The rise in DARTs primarily reflects investors’ willingness to invest in equity markets.

At the end of July, E*TRADE’s total number of accounts were 8 million, comprising 5.9 million retail accounts, 2 million corporate services accounts, and 0.1 million advisor services accounts.

E*TRADE’s total accounts included 68,268 net new accounts for the reported month. The total number of brokerage accounts highlights the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new retail assets came in at a negative $0.4 billion compared with the $4 billion reported last month. Net new advisor service assets were $0.2 billion.

At the end of July, E*TRADE’s customer security holdings were $347.6 billion, up from the $324.6 billion witnessed in June. The company’s brokerage-related cash came in at $91.4 billion compared with the prior month’s $92.2 billion. Additionally, on-balance sheet customer cash and deposits for the company totaled $57.3 billion compared with the $59.4 billion recorded in June.

Peer Performance

LPL Financial Holdings Inc.’s (LPLA - Free Report) total brokerage and advisory assets of $792 billion at the end of July grew 4% from the prior month and 11% year over year. Of the total assets, brokerage assets were $399.2 billion and advisory assets totaled $392.7 billion. This rise resulted from improved equity markets.

The Charles Schwab Corporation (SCHW - Free Report) reported the monthly activity report for July, which shows decent results compared with the prior month. New brokerage accounts were 206,000, up 2% from June 2020. Total client assets came in at $4.28 trillion, up 4% from the prior month.

Interactive Brokers Group (IBKR - Free Report) released the Electronic Brokerage segment’s performance metrics for July. The segment reported a substantial surge in DARTs on a year-over-year basis. This can be attributed to the significant rise in trading activities owing to concerns over the coronavirus crisis.

Our Viewpoint

Though the uncertain macroeconomic environment might result in volatile trading activities, growth in DARTs and new brokerage accounts will prove beneficial for the company.

E*TRADE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have gained 31.3% in the last three months compared with the industry’s growth of 17.1%.

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