On Feb 21, 2014, we issued an updated research report on
TD Ameritrade Holding Corporation
). The company, which operates in the investment brokerage space,
recently reported better-than-expected fourth-quarter 2013
results with increased revenues, partially offset by higher
operating expenses. Though the company's strong balance sheet and
rising daily average client trades are encouraging, we remain
cautious given the macroeconomic headwinds across the industry.
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TD Ameritrade posted earnings per share of 35 cents, which beat
the Zacks Consensus Estimate of 32 cents. Moreover, the reported
figure was higher than 27 cents earned in the year-ago quarter.
With this, the company has delivered earnings surprises in 3 out
of the past 4 quarters, while reporting in-line earnings in the
Net revenue was up 16% year over year to $752.0 million.
Additionally, average client trades per day in the quarter
increased 24% year over year to 413,743. Further, at the
quarter-end, TD Ameritrade reported total client assets worth
$596.5 billion, rising 24% year over year.
However, an increase in employee compensation and benefits
expenses pushed up total operating expense by 9% year over year
to $445.0 million.
Following the results, Zacks Consensus Estimate has been flat
over the past 30 days. The Zacks Consensus Estimate for 2014 and
2015 remained unchanged at $1.40 and $1.67, respectively.
Innovation in online trading, long-term investment in products
and services, delivery of advanced customer service, creative as
well as cost-effective marketing and sales, are TD Ameritrade's
key strategies to boost its trading and investing business.
Further, the company's association with
The Toronto-Dominion Bank
) provides an opportunity to cross sell its products. This is
expected to be a significant growth driver for TD Ameritrade's
Currently, TD Ameritrade carries a Zacks Rank #2 (Buy).
Key Picks in the Investment Brokerage Sector
Other stocks worth considering in the investment brokerage sphere
Investment Technology Group Inc.
Piper Jaffray Companies
). Both these carry a Zacks Rank #1 (Strong Buy).