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TD Ameritrade (AMTD) Poised for Growth; Should You Buy?

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The recent interest rate hike is anticipated to bring stability to top-line generation, which creates a buying opportunity for long-term horses. TD Ameritrade Holding CorporationAMTD is one such stock. The company's growth story is aided by a sturdy top line, and earnings growth, trading activities as well as steady capital deployment actions.

Record earnings, revenues and net new client assets aided the company to surge 55.8% over the last six months, compared with the 56.5% growth for the Zacks categorized Investment Bank industry.

Moreover, the company's earnings estimates increased 3% for fiscal 2017, over the last 30 days. As a result, it flaunts a Zacks Rank #1 (Strong Buy).

TD Ameritrade has been diligently making efforts to maintain its asset gathering momentum, over the past few years. Notably, during fiscal 2016, the company witnessed an annualized growth rate of 9% in net new client assets, within the long-term target of increasing net new client assets at an annual rate of 7-11%.

Additionally, the company's net revenue recorded a 6% CAGR, over the last five years ending fiscal 2016. Based on the company's robust business model, focus on high net-worth clients and improving service model to boost engagement and retention; we expect TD Ameritrade to experience significant top-line growth in the future.

Further, the company's growth prospects look encouraging, given its latest deal to acquire Scottrade Financial Services, Inc. This transaction is expected to result in significant scale to TD Ameritrade's retail business, fortify trading operations and expand its branch network substantially. Also, the deal is anticipated to generate double-digit EPS accretion, post conversion.

TD Ameritrade's trading volumes have been graphing an uptrend. On a year-over-year basis, the company's average client trades per day increased 4%, 14% and 8% in the fiscal years of 2013, 2014 and 2015, respectively, with a slight rise in 2016 as well, benefiting from the volatility in markets.

Stocks to Consider

E*TRADE Financial CorporationETFC has been witnessing upward estimate revisions for the last 30 days. Further, the stock has climbed over 50.3% in the last six months. It currently flaunts a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.

The Charles Schwab CorporationSCHW has been recording upward estimate revisions for the last 30 days. In addition, the company's shares climbed nearly 57.2%, over the last six months. It currently carries a Zacks Rank #2 (Buy).

The Goldman Sachs Group, Inc.GS has witnessed an upward earnings estimate revisions for the past 30 days. Its share price jumped 61.5% over the last six months. It currently sports a Zacks Rank #1.

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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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