In its monthly market activity report for November 2012,
The Charles Schwab Corporation
) reported Daily Average Revenue Trades (DARTs) of 431,800,
almost at par with the prior month, but down 2% from the
prior-year month. This implies that the company witnessed
insufficient trading activity during the month. Further,
weather-related market closures for two days impacted the trading
activity in November.
Schwab's net new assets bought by the new and existing clients
totaled $16.2 billion, surging significantly from November 2011,
but plunging 34% from October 2012. Also, this included a $5.4
billion inflow related to a mutual fund clearing services client
along with a $0.9 billion outflow associated with a strategic
transfer from Corporate Brokerage Services. Further, total client
assets stood at $1.92 trillion, improving 15% from November 2011
and 1% from October 2012.
Schwab opened 70,000 brokerage accounts in the reported month,
climbing 9% from November 2011 but down 5% from October 2012. The
company's active brokerage accounts totaled 8.75 million, up 2%
year over year and almost flat compared with the prior-month.
Moreover, clients' banking accounts augmented 10% year over year
and 1% over the prior-month to 857,000. Moreover, the number of
corporate retirement plan participants was 1,560 million,
improving 6% from November 2011 but stable compared to October
TD Ameritrade Holding Corporation
) - an online brokerage firm - reported a 3% rise in average U.S.
trades in its Activity Report for the month of November. However,
the U.S. trades declined 10% on a year-over-year basis.
For the reported month, Daily Average Revenue Trades (DARTs) were
341,000, up from 330,000 recorded in the prior month. The rise in
DARTs was largely resulted from the improvement in the equity
Lower trading activities and fluctuating interest rates are
expected to continuously impact the company's financials in the
near term. Further, we remain concerned about the company's low
capital intensity relative to its peers. However, its focus on
low-cost capital structure will help it sustain better results in
the upcoming quarters.
Schwab currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating.
TD AMERITRADE (AMTD): Free Stock Analysis
SCHWAB(CHAS) (SCHW): Free Stock Analysis
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