On Sep 14, Zacks Investment Research upgraded
TD Ameritrade Holding Corporation
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
TD Ameritrade has been witnessing rising earnings estimates
following the announcement of robust fiscal third-quarter 2013
earnings. Moreover, this brokerage firm has delivered positive
earnings surprises in 3 of the last 4 quarters, with an average
beat of 7.7%.
TD Ameritrade reported fiscal 2013 results on Jul 23. Earnings
per share of 33 cents surpassed the Zacks Consensus Estimate by 2
cents. Results benefited from higher revenues. Further, an
increase in both total client assets and daily average client
trades were the positives. However, a rise in expenses was the
Net revenue rose 9% year over year to $725 million. Average
client trades per day increased 12% year over year to 399,216.
Net new client assets were $10.8 billion, up 11% from $9.7
billion in the past year.
At the end of the quarter, TD Ameritrade reported total client
assets worth $523.5 billion, up 18% year over year. Moreover,
average spread-based balance was $84.7 billion, up 14% from $74.2
billion in the prior-year quarter. Average fee-based balance was
$118.1 billion, up 34% year over year.
Net interest revenue was $120.0 million, up 2% year over year.
Operating income climbed 17% year over year to $298 million. On
the other hand, total operating expense rose 3% year over year to
Additionally, the company reported a rise in average client
trades from the prior year in its Activity Report for Aug 2013.
For the reported month, average client trades were 382,000, up
26% year over year. Further, U.S. trades increased 2% from the
prior-month level. The rise in client trades largely resulted
from a resurgence in the equity markets.
Additionally, following the earnings release, the Zacks Consensus
Estimate for 2013 increased 6.2% to $1.20 per share over the last
60 days. For 2014, the Zacks Consensus Estimate increased 5.6% to
$1.32 per share over the same time frame.
Positive earnings surprises and favorable estimate revisions
stimulated the rank upgrade.
Other Stocks to Consider
While we prefer TD Ameritrade, other stocks with a Zacks Rank #1
German American Bancorp Inc.
First Interstate Bancsystem Inc.
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