On March 18, 2014, we issued an updated research report on
). This brokerage firm recently reported an upswing in the total
daily average revenue trades (DARTs) for the first two months of
the current quarter. DARTs jumped 26% and 3% in January and
February, respectively and came in at 201,223 as of Feb 28, 2014.
TD AMERITRADE (AMTD): Free Stock Analysis
E TRADE FINL CP (ETFC): Free Stock Analysis
GAIN CAP HLDGS (GCAP): Free Stock Analysis
PIPER JAFFRAY (PJC): Free Stock Analysis
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Though volatility in equity markets has affected the level of
DARTs over the past few years, the rebound in the equity markets
has been favorable for the company. Moreover, the company's
aggressive focus on loss mitigation strategies such as short
sales, loan modifications and transfers to better servicers are
expected to enhance DARTs in the coming months.
In January, the company reported in-line fourth-quarter 2013
results as compared with the Zacks Consensus Estimate, but
improved significantly from a net loss in the prior-year quarter.
Quarterly results benefited from a rise in DARTs and reduced
provisions. Moreover, a strong capital position was exhibited in
the quarter. However, mounting operating expenses reflected
undisciplined expense management.
The company exhibited a decent performance in 2013 as evident
from its earnings history. In 2013, the company posted in-line
earnings in 3 quarters and 1 positive earnings surprise in the
E*TRADE continues to streamline its balance sheet risk by
reducing credit risk in its loan portfolios. Notably, the loan
portfolio declined 19% in 2013. Over the next one or two
quarters, the quarterly run-off of the portfolio is expected to
be $500 million and decline to $350 million per quarter by the
end of 2014.
E*TRADE's initiatives to reduce balance sheet risk look promising
though it might exert near-term pressure on the margins.
Moreover, the company's decision to focus on core operations and
exit the market making business is expected to improve
profitability further in the near term.
Further, the Zacks Consensus Estimate over the past 30 days
improved 1.1% to 92 cents per share for 2014. Also, for 2015 it
increased 1.7% to $1.17 per share over the same time frame.
E*TRADE currently carries a Zacks Rank #1 (Strong Buy).
Key Picks from the Sector
Other investment brokers worth considering include
GAIN Capital Holdings, Inc.
Piper Jaffray Companies
). All these 3 carry a Zacks Rank #1.