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E*TRADE (ETFC) Reports 15% Y/Y Growth in January DARTs

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E*TRADE Financial CorporationETFC reported a rise in its Daily Average Revenue Trades (DARTs) for Jan 2017. According to its monthly market activity, the company's DARTs were 201,464, up 8% from the prior month and 15% year over year.

Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees. The increase in DARTs largely reflects investors' willingness in investing in equity markets.

At the end of the month under review, E*TRADE's total number of accounts were approximately 5.3 million, comprising about 3.5 million brokerage accounts, 1.5 million stock plan accounts and 0.32 million banking accounts.

For the reported month, E*TRADE's total brokerage accounts included 42,055 gross new brokerage accounts. Total brokerage accounts highlight the company's ability to gain and retain customers who trade and invest.

Moreover, E*TRADE's net new brokerage assets were $0.8 billion compared with $1.4 billion in the prior month.

At the end of Jan 2017, E*TRADE's customer security holdings were $231.4 billion, up from $224.4 billion in the prior month. The company's brokerage-related cash inched up 1% to $51.8 billion from $51.4 billion in the prior month, with customers being the net buyers of about $0.3 billion in securities. Moreover, bank-related cash and deposits for the company were $5.2 billion, down from $5.3 billion in the prior month.

Peer Performance

Among other investment brokers, Interactive Brokers Group, Inc.'s IBKR Electronic Brokerage segment reported a year-over-year decrease in DARTs for Jan 2017. Total client DARTs were 646,000, down 22% from Jan 2016 but up 9% from Dec 2016. Moreover, total customer accounts were 391,000, up 17% year over year and 2% from the prior month.

TD Ameritrade Holding Corporation AMTD came up with average client trades per day of 521,000 in its activity report for Jan 2017. While the reported figure climbed 8% from the prior month, it decreased 8% compared with the year-ago period.

The Charles Schwab Corporation SCHW released monthly activity report for Jan 2017 which displays an improvement over the prior-year period. Total client assets were $2.83 trillion at the end of the month, up 17% year over year. Further, client assets receiving ongoing advisory services were $1.43 trillion, up 17% year over year.

Our Viewpoint

Growth in DARTs and new brokerage accounts will prove to be beneficial for the company. We, however, are concerned about the sluggish macroeconomic environment, which might lead to lower trading activities.

E*TRADE currently carries a Zacks Rank #2 (Buy). The company's shares have gained 16.9% in 2016, underperforming the 22.4% growth for the Zacks categorized Investment Bank industry.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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E*TRADE Financial Corporation (ETFC): Free Stock Analysis Report

The Charles Schwab Corporation (SCHW): Free Stock Analysis Report

Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report

TD Ameritrade Holding Corporation (AMTD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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