Online brokerage firm
) reported Daily Average Revenue Trades (DARTs) of 171,271 for Apr
2014, down 13.2% from Mar 2014. However, it increased 21.2% on a
Broker performance is generally measured through DARTs that
represent the number of trades from which brokers can expect
commissions or fees.
At the end of the month under review, E*TRADE's total number of
accounts came in at approximately 4.7 million, of which about 3.1
million are brokerage accounts, 1.2 million are stock plan accounts
and 0.4 million are banking accounts.
For the reported month, E*TRADE's total brokerage accounts included
40,263 gross new brokerage accounts. Notably, gross new brokerage
accounts fell 6.5% month over month. Moreover, E*TRADE's net new
brokerage assets were negative $0.7 billion, compared with $1.5
billion in the prior month. Total brokerage accounts reflect the
company's ability to attract and retain traders and investors.
As of April end, E*TRADE's customer security holdings were $187.9
billion, up 0.4% from the prior month. However, the company's
brokerage-related cash fell 3.2% from the prior month to $38.8
billion, with customers being the net buyers of about $0.7 billion
in securities. Moreover, bank-related cash and deposits for the
company stood at $6.1 billion, down from $6.3 billion in the prior
Although E*TRADE opened the second quarter with lower trading
activities, nothing conclusive can be arrived at and we look
forward to the performance of the remaining 2 months. We remain
cautious owing to a challenging economy, market volatility and new
regulations that might further lower trading activities.
However, we remain encouraged owing to the company's initiatives to
reduce balance sheet risk. While this will benefit the company in
the long run, there will be pressure on the net interest margin in
the near term.
E*TRADE currently carries a Zacks Rank #1 (Strong Buy). In this
Investment Technology Group Inc.
) is another company worth considering with the same Zacks Rank.
Performance of Other Brokerage Firms
) reported an uptick in its average client trades per day of
448,000 in its Activity Report for Apr 2014. This figure was up 7%
from the prior month while it increased 17% year over year.
Another sector participant
) also recorded a rise in Daily Average Trades (DATs) for Apr 2014.
In its monthly market activity report, the company reported DATs of
534,900, marking an increase of 14% from the prior-year month and
4% from the previous month.
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