Schwab Updates: Acquires Compliance11 and Liquidates Stable Value Fund

+1.46%
Upside
71.88
Market
72.93
Trefis
SCHW: Charles Schwab logo
SCHW
Charles Schwab

Charles Schwab Corporation (NYSE:SCHW) recently completed acquisition of Compliance 11, Inc. which is a leading provider of cloud based compliance software. [1] The latest acquisition will help Schwab to extend its compliance, disclosures, and reporting offerings to corporate clients and to expand its Designated Brokerage Services business. The growing need for more efficient and enhanced compliance monitoring in the present regulatory environment will result in more business for the company. Schwab competes with E-Trade (NASDAQ:ETFC) and Ameritrade (NYSE:AMTD).

Our price estimate for Schwab is $15, which is around 40% above current market price.

See our complete analysis of Schwab’s stock

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The company had earlier announced its plan to liquidate its Schwab Stable Value Fund, which has $7.6 billion in assets, by the beginning of the second quarter of next year. [2] The company cited low interest rates and difficulties in obtaining adequate wrap coverage as the reason to wind up. Some like Douglas Apple of Pensions & Investments believe that products with wrap coverage are rebounding from the low levels of 2008 and have suggested that the exit represents company’s distinctive strategic position. [3]

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Notes:
  1. Schwab Completes Acquisition of Compliance11, Inc. Business Wire []
  2. $7.6 billion Schwab Stable Value Fund to liquidate, Pensions & Investments []
  3. Schwab’s exit aside, stable value rides wave of rising fees, Pensions & Investments []