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TD Ameritrade Holding Corporation (AMTD): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Posted
12/19/2013 7:00:00 AM
By: Zacks.com
Referenced Stocks:AMTD

Summary:
TD Ameritrade 's second-quarter fiscal 2014 earnings beat the Zacks Consensus Estimate and were higher than the prior-year quarter figure as well. Results were primarily aided by top-line growth. Further, a rise in total client assets and daily average client trades were among other positives. However, results reflected undisciplined expense management. The company is focused on improving its trading and investing business through product innovation, enhanced customer service as well as cost-effective marketing and sales. We remain cautious about volatile trading volumes amid a challenging macroeconomic environment. However, IDA agreements to mitigate the regulatory impact will likely benefit the company in the near term.

Overview:

Founded in 1971 in California and headquartered in Omaha, NV, TD Ameritrade Holding Corporation provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States.

The company's offerings include TD Ameritrade for self-directed retail investors TD Ameritrade Institutional, which provides brokerage and custody services to independent RIAs and their clients thinkorswim that offers a suite of trading platforms serving self-directed and institutional traders, and money managers and Investools, which provides investor education products and services for stock, option, foreign exchange, futures, mutual fund, and fixed-income investors Amerivest, an online advisory service that develops portfolios of exchange-traded funds to help long-term investors pursue their financial goals and TD Ameritrade Corporate Services, which provides self-directed brokerage services to employees and executives of different corporations.

The company provides these services through its network of retail branches, mobile trading applications and the Internet. Further, TD Ameritrade has interactive voice response facility and registered representatives to provide services over the phone.

Notably, Canada-based Toronto-Dominion Bank (TD Bank) holds 41% stake in TD Ameritrade (as of Dec 31, 2014). Ameritrade became TD Ameritrade when it acquired TD Waterhouse USA in 2006. It was then that TD Bank received a stake in TD Ameritrade. Further in Dec 2013, TD Ameritrade modified its agreement with Canadian bank, The Toronto-Dominion Bank. The amendment extends the existing agreement's date of expiry from Jan 24, 2016 to Jan 24, 2021. It also enables TD Ameritrade to carry out more stock buybacks.


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