Charles Schwab Corp.
) released its Monthly Activity Report for May 2012. The company
recorded an increase of 9% in Daily Average Revenue Trades (DARTs)
from May 2011 to 432,300. However, the company's DARTs slipped 6%
from the prior month.
In May, Schwab registered a marginal fall in new assets, with
net inflow of $9.2 billion as against $9.4 billion in May 2011.
However, the new assets showed an impressive growth from $1.0
billion recorded in April 2012.
Further, Schwab's total client assets stood at $1.76 trillion as
of May-end, rising 5% from $1.67 trillion in the prior-year month,
but declining 4% from $1.83 trillion in the prior month. The
company opened 70,000 brokerage accounts in the reported month,
climbing 15% from 61,000 in May 2011, but slipping 20% from 87,000
in April 2012.
At the end of the reported month, Schwab's active brokerage
accounts totaled 8.706 million, up 7% year over year and almost at
par sequentially. Moreover, clients' banking accounts grew 11% year
over year and 1% sequentially to 815,000 in May. Similarly, the
number of corporate retirement plan participants was 1,522 million,
improving 6% from May 2011 and almost in line with April 2012.
E*TRADE Financial Corporation
) reported almost in-line average U.S. trades numbers compared with
the prior month in its Activity Report for the month of May.
However, the U.S. trades dropped 5% year on year to 146,254. The
fall largely resulted from the uncertain economic recovery and
investors' reluctance to invest in the equity markets.
Earlier this month,
TD Ameritrade Holding Corporation
) recorded 2% year-over-year fall in DARTs for May to 370,000.
However, DARTs improved 1% from the prior month. TD Ameritrade
announced $431.7 billion of total client assets for May-end, up 3%
from May 2011 and down 4% from April 2012.
We believe that the recent acquisitions will boost Schwab's top
line to some extent, leading to overall growth. While its focus on
low-cost capital structure will help sustain better results in the
upcoming quarters, the company's financials will continue to be
impacted by lower trading activities and volatile interest rates.
Moreover, we remain concerned about the company's low capital
intensity relative to its peers.
Schwab currently retains a Zacks # 3 Rank, which translates into
a short-term Hold rating.
TD AMERITRADE (AMTD): Free Stock Analysis
E TRADE FINL CP (ETFC): Free Stock Analysis
SCHWAB(CHAS) (SCHW): Free Stock Analysis Report
To read this article on Zacks.com click here.