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E*TRADE Financial's (ETFC) May DARTs Rise 1% From April

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E*TRADE Financial (ETFC - Free Report) reported a rise in Daily Average Revenue Trades (DARTs) for May 2018. According to its monthly market activity, the company’s DARTs came in at 253,649, up 1% from the prior month and 20% year over year. Notably, derivatives comprised 34% of DARTs in May.

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 largely reflects investors’ willingness to invest in equity markets.

At the end of the month under review, E*TRADE’s total number of accounts were approximately 5.7 million, comprising about 3.9 million brokerage accounts, 1.5 million stock plan accounts and 0.3 million banking accounts.

For the reported month, E*TRADE’s total brokerage accounts included 40,261 gross new brokerage accounts. Total brokerage accounts highlight the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new brokerage assets came in at $1.4 billion compared with $18.2 billion recorded in the prior month.

At the end of May 2018, E*TRADE’s customer security holdings were $331.5 billion, up from the $317.1 billion reported in April 2018. The company’s brokerage-related cash inched up 1% to $52.5 billion, compared with the prior month, with customers being the net buyers of about $0.4 billion in securities. In addition, bank-related cash and deposits for the company totaled $4.8 billion, up from $4.7 billion reported in the previous month.

Peer Performance

Interactive Brokers Group, Inc.’s (IBKR - Free Report) Electronic Brokerage segment reported a year-over-year increase in DARTs for May 2018. Total client DARTs were 780,000, increasing 16% from May 2017, but decreasing 4% from April 2017. Total customer accounts grew 27% year over year and 1% from the prior month to 532,800, in May 2018.

The Charles Schwab Corporation’s (SCHW - Free Report) monthly activity for May 2018 reflects year-over-year rise. Total client assets were $3.4 trillion at the end of the month, increasing 13% from the year-ago quarter. Further, client assets receiving ongoing advisory services were $1.8 trillion, up 15% year over year.

Among others, LPL Financial Holdings Inc. (LPLA - Free Report) is expected to release May monthly activity reports later this week.

Our Viewpoint

Growth in DARTs and new brokerage accounts will prove beneficial for the company. We, however, are concerned about the uncertain macroeconomic environment, which might lead to lesser trading activities.

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

The company’s shares have gained nearly 29.2% over the past six months compared with marginal growth recorded by the industry.

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