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E*TRADE (ETFC) July DARTS Down, Total Accounts Increase
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E*TRADE Financial Corporation reported a decline in its Daily Average Revenue Trades (DARTs) in the monthly market activity report for Jul 2016. According to the report released last week, E*TRADE’s DARTs were 147,100, down 1.2% from the preceding month and 1.5% on a year-over-year basis.
Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees.
At the end of Jul 2016, E*TRADE’s total number of accounts were approximately 5.06 million, increasing slightly from the preceding month and 3.6% from the prior-year month. Total accounts for the reported month comprised about 3.28 million brokerage accounts, 1.45 million stock plan accounts and 0.33 million banking accounts.
For the reported month, E*TRADE’s total brokerage accounts included 22,899 gross new brokerage accounts. Notably, net new brokerage accounts were 387. Total brokerage accounts reflect the company’s ability to gain and retain customers who trade and invest.
E*TRADE’s net new brokerage assets were $0.3 billion compared with $0.8 billion in the prior month and $0.2 billion in the prior-year month.
As of the end of Jul 2016, E*TRADE’s customer security holdings were $216.7 billion, up 3.8% from the preceding month and 0.5% from the prior-year month. The company’s brokerage-related cash of $45.0 billion increased 4.7% from the preceding month and 9.2% from the prior-year month. Customers were net sellers of about $2 billion in securities during the reported month. Bank-related cash and deposits for the company stood at $5.2 billion, in line with the prior month figure.
Peer Performance
Among other investment brokers, Interactive Brokers Group, Inc.’s (IBKR - Free Report) Electronic Brokerage segment reported a decline in its brokerage metrics for Jul 2016 on a year-over-year basis. Total client DARTs were 602,000, down 8% from Jul 2015 and 6% from Jun 2016. However, total customer accounts were 360,100, up 15% from the prior-year month and 1% from the preceding month.
TD Ameritrade Holding Corp. (AMTD - Free Report) reported average client trades of 454,000 per day in its activity report for Jul 2016. This was almost in line with the prior-year period but down 3% from the previous month. As of Jul 31, 2016, TD Ameritrade reported $760.2 billion in total client assets, up 8% from the prior-year period and 3% from the preceding month.
The Charles Schwab Corp. (SCHW - Free Report) reported total client assets of $2.7 trillion for Jul 2016, increasing 5% year over year and 3% sequentially. Client assets receiving ongoing advisory services were $1.35 trillion as of July end, up 6% year over year and 3% from the prior month. The average interest earning assets were $191.9 billion, as of July end. The figure rose 21% on a year-over-year basis and 2% from the prior month.
Our Viewpoint
Amid the challenging economic scenario, growth in new brokerage accounts will prove to be beneficial for the company. We, however, are concerned about the sluggish macroeconomic environment, which might lead to lower trading activities. Moreover, fluctuating interest rates are expected to continuously impact the company’s financials in the near term.
Nevertheless, E*TRADE’s initiatives to reduce balance sheet risk appear to be promising. We are also encouraged by the brokerage firm’s restructuring moves and efforts to revamp its brand, launch new products and services, and improve its technology base to offer a better digital experience to customers.
E*TRADE currently carries a Zacks Rank #3 (Hold).
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E*TRADE (ETFC) July DARTS Down, Total Accounts Increase
E*TRADE Financial Corporation reported a decline in its Daily Average Revenue Trades (DARTs) in the monthly market activity report for Jul 2016. According to the report released last week, E*TRADE’s DARTs were 147,100, down 1.2% from the preceding month and 1.5% on a year-over-year basis.
Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees.
At the end of Jul 2016, E*TRADE’s total number of accounts were approximately 5.06 million, increasing slightly from the preceding month and 3.6% from the prior-year month. Total accounts for the reported month comprised about 3.28 million brokerage accounts, 1.45 million stock plan accounts and 0.33 million banking accounts.
For the reported month, E*TRADE’s total brokerage accounts included 22,899 gross new brokerage accounts. Notably, net new brokerage accounts were 387. Total brokerage accounts reflect the company’s ability to gain and retain customers who trade and invest.
E*TRADE’s net new brokerage assets were $0.3 billion compared with $0.8 billion in the prior month and $0.2 billion in the prior-year month.
As of the end of Jul 2016, E*TRADE’s customer security holdings were $216.7 billion, up 3.8% from the preceding month and 0.5% from the prior-year month. The company’s brokerage-related cash of $45.0 billion increased 4.7% from the preceding month and 9.2% from the prior-year month. Customers were net sellers of about $2 billion in securities during the reported month. Bank-related cash and deposits for the company stood at $5.2 billion, in line with the prior month figure.
Peer Performance
Among other investment brokers, Interactive Brokers Group, Inc.’s (IBKR - Free Report) Electronic Brokerage segment reported a decline in its brokerage metrics for Jul 2016 on a year-over-year basis. Total client DARTs were 602,000, down 8% from Jul 2015 and 6% from Jun 2016. However, total customer accounts were 360,100, up 15% from the prior-year month and 1% from the preceding month.
TD Ameritrade Holding Corp. (AMTD - Free Report) reported average client trades of 454,000 per day in its activity report for Jul 2016. This was almost in line with the prior-year period but down 3% from the previous month. As of Jul 31, 2016, TD Ameritrade reported $760.2 billion in total client assets, up 8% from the prior-year period and 3% from the preceding month.
The Charles Schwab Corp. (SCHW - Free Report) reported total client assets of $2.7 trillion for Jul 2016, increasing 5% year over year and 3% sequentially. Client assets receiving ongoing advisory services were $1.35 trillion as of July end, up 6% year over year and 3% from the prior month. The average interest earning assets were $191.9 billion, as of July end. The figure rose 21% on a year-over-year basis and 2% from the prior month.
Our Viewpoint
Amid the challenging economic scenario, growth in new brokerage accounts will prove to be beneficial for the company. We, however, are concerned about the sluggish macroeconomic environment, which might lead to lower trading activities. Moreover, fluctuating interest rates are expected to continuously impact the company’s financials in the near term.
Nevertheless, E*TRADE’s initiatives to reduce balance sheet risk appear to be promising. We are also encouraged by the brokerage firm’s restructuring moves and efforts to revamp its brand, launch new products and services, and improve its technology base to offer a better digital experience to customers.
E*TRADE currently carries a Zacks Rank #3 (Hold).
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