In its monthly market activity report for July 2012,
The Charles Schwab Corporation
) reported flat Daily Average Revenue Trades (DARTs) compared with
the prior month. This implies that the company witnessed
insufficient trading activity during the month.
TD AMERITRADE (AMTD): Free Stock Analysis
SCHWAB(CHAS) (SCHW): Free Stock Analysis Report
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Schwab's net new assets bought by new and existing clients totaled
$7.4 billion, down 25% from July 2011 but up 28% from June 2012.
Further, total client assets stood at $1.82 trillion, improving 11%
year over year and 1% sequentially. However, total client daily
average trades came in at 396,100, declining 2% from the July 2011
and 5% from the June 2012.
The company opened 62,000 brokerage accounts in the reported month,
climbing 11% from 56,000 in July 2011, but slipping 3% from 64,000
in June 2012. Schwab's active brokerage accounts totaled 8.723
million, up 7% year over year and almost at par sequentially.
Moreover, clients' banking accounts grew 10% year over year and 1%
sequentially to 829,000. Similarly, the number of corporate
retirement plan participants was 1,537 million, improving 7% from
July 2011 and 1% from the last month.
Earlier this month,
TD Ameritrade Holding Corporation
) recorded 9% year-over-year fall in DARTs for July to 332,000. TD
Ameritrade reported $449.3 billion in total client assets, up 9%
year over year and 1% from the prior month. Moreover, average
spread-based balances increased 14% year over year to $74.7
billion. Further, these balances upped 1% from June 2012.
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 to sustain better results
in the upcoming quarters.
Schwab currently retains a Zacks # 3 Rank, which translates into a
short-term Hold rating. Considering the fundamentals, we maintain a
long-term 'Neutral' recommendation on the stock.