In its monthly market activity report for May 2013,
The Charles Schwab Corporation
) reported Daily Average Trades (DATs) of 505,400. The DATs were
up 17% from 432,300 in the year-ago month and 8% from 470,000 in
the prior month.
Total client assets stood at $2.11 trillion, improving 20%
from May 2012 and 0.2% from Apr 2013. However, Schwab's net new
assets - bought by the new and existing clients - stood at
negative $1.9 billion, compared with $9.2 billion reported in the
year-ago month and $22 million in the prior month. Also, this
included a $10.3 billion outflow related to mutual fund clearing
Schwab opened 78,000 new brokerage accounts in the reported
month, 11% higher than the May 2012 level but 19% lower than Apr
2013 level. The company's active brokerage accounts totaled 8.94
million, up 3% year over year and 0.3% sequentially.
Moreover, clients' banking accounts elevated 11% year over year
and 1% over the prior month to 903,000. Also, the company had
1.59 million corporate retirement plan participants, improving 5%
from May 2012, but declining marginally from Apr 2013.
The rise in DATs and new brokerage accounts are anticipated to be
favorable for Schwab. However, fluctuating interest rates and
lower trading activities are expected to adversely affect the
company's financials in the near term.
Additionally, Schwab's capital intensity in comparison with other
investment brokers remains a major concern. However, the focus on
low-cost capital is expected to help the company achieve better
results in the subsequent quarters.
Schwab currently carries a Zacks Rank #3 (Hold). However, some
better performing investment brokers include
Investment Technology Group Inc
Ladenburg Thalmann Financial Services Inc
) with a Zacks Rank #1 (Strong Buy) and
Cowen Group, Inc
) with a Zacks Rank #2 (Buy).
COWEN GROUP INC (COWN): Free Stock Analysis
INVEST TECH-NEW (ITG): Free Stock Analysis
LADENBURG THALM (LTS): Free Stock Analysis
SCHWAB(CHAS) (SCHW): Free Stock Analysis
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