Weekly Brokerage Notes: Trading Activity Rises for Ameritrade, E*Trade and Charles Schwab

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E*TRADE Financial

TD Ameritrade (NYSE:AMTD), E*Trade Financial (NASDAQ:ETFC) and Charles Schwab (NYSE:SCHW) released their monthly volume figures for the month of October at the end of last week. October was a positive month for all three in terms of trading activity and a growth in their client assets. The brokerages reported a continued increase in their respective client assets under management. The companies’ stocks fell by 2-3% in the second half of the week following the release of their respective monthly figures. Here’s a quick roundup on the individual metrics and October performance for the brokerage firms.

TD Ameritrade

Ameritrade’s trading volume in October was almost 18% higher than the 2013 period with an average of 494,000 trades per day. This was a significant improvement from Ameritrade’s Q4 FY 2014, when the average trades per day were up by an average of 5% on a year-on-year (y-o-y) basis through the quarter. Ameritrade’s Insured Deposit Account (IDA) balances grew both sequentially (2%) and annually (4%) to $75.7 billion, continuing the trend from the previous twelve months. Additionally, its interest-earning assets grew both sequentially (1%) and annually (13%) to $19.6 billion in October. Ameritrade’s total client assets were up to $664 billion from $574 billion in August last year. [1]

  • Trefis has a $33 price estimate for Ameritrade’s stock, implying a market cap of $18.3 billion. This is slightly lower than the current market price which fell by 2% during the week.
  • We estimate the company’s 2014 calendar year revenues to be around $3.2 billion and an earnings per share of $1.78 in FY 2015 ending September, compared to a consensus of $1.61 according to Reuters.
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See our full analysis for TD Ameritrade

E*Trade Financial

E*Trade witnessed a similar improvement in trading activity. Daily average revenue trades (DARTs) for the month of October were 9% higher than September levels and 10% higher than prior year levels at 175,000 trades per day. E*Trade’s net client assets rose by about 2% y-o-y to $45.7 billion. [2] E*Trade’s total client assets (customer assets in brokerage accounts and banking accounts combined) were up to $288 billion from $248 billion in the year ago period.

  • Trefis has a $21 price estimate for E*Trade’s stock, translating into a $5.9 billion market cap. This is about 10% below the market price, which fell by 2-3% during the week.
  • We estimate the company’s revenues to be over $1.8 billion and earnings per share of $1.10 in 2014, compared to a consensus of $1.08 according to Reuters.

See our full analysis for E*Trade Financial

Charles Schwab

Charles Schwab added 76,000 new accounts in October taking the total number of active brokerage accounts to over 9.3 million. Schwab’s total client assets under management were over $2.44 trillion in October, up from just over $2.17 trillion in October 2013. We currently forecast Schwab’s total client assets to breach the $2.5 trillion mark before the end of next year. [3]

  • Trefis has a $27 price estimate for Charles Schwab, translating into a $33.2 billion market cap. This is about 10% lower than the current market price.
  • We estimate the company’s 2014 revenues to be $6.2 billion.

See our full analysis for Charles Schwab

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Notes:
  1. Ameritrade Monthly Metrics For October, TD Ameritrade Investor Relations, November 2014 []
  2. E*Trade Monthly Metrics For October, E*Trade Investor Relations, November 2014 []
  3. Charles Schwab Monthly Metrics For October, Charles Schwab Investor Relations, November 2014 []