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TD Ameritrade’s (AMTD) July Daily Client Trades Rise 13% Y/Y


Omaha, NE-based online brokerage firm, TD Ameritrade Holding Corporation AMTD reported average client trades per day of 514,000 in its activity report for Jul 2017. The reported figure remained unchanged from the prior-month tally and up 13% from the year-ago period.

Broker performance is generally measured through monthly average client trades per day. This represents the number of trades from which brokers earn commissions or fees.

As of Jul 31, 2017, TD Ameritrade reported $900.9 billion in total client assets, up 2% from the prior month and 19% year over year. Average fee-based balances were $195.6 billion, up 1% from the prior month and 17% from the prior-year period. Average spread-based balance of $116.5 billion was flat from the prior month and up 7% year over year.

Improved Quarterly Performance

During third-quarter fiscal 2017 (ended Jun 30, 2017), average client trades per day increased 10.5% year over year to 510,358.

As of Jun 30, 2017, net new client assets totaled $22 billion, up 61.8% year over year. Total client assets came in at $882.4 billion, up 19.8%.

Average spread-based balance came in at $117.8 billion, jumping 11% year over year. Average fee-based investment balance was up 17% to $189.7 billion.

TD Ameritrade Poised for Growth

Innovations in online trading, long-term investment in products and services, delivery of advanced customer service, and creative marketing and sales are TD Ameritrade’s key strategies for boosting the trading and investing business.

Further, the company’s association with The Toronto-Dominion Bank TD provides an opportunity to cross sell its products. This is anticipated to significantly drive organic growth. Also, its deal in Oct 2016, to acquire Scottrade, is likely to be accretive to EPS in double-digit figure. This deal is also projected to drive annual expense savings of $450 million, with additional $300 million of savings, over the long run.

However, we remain cautious as a persistent rise in expenses and stringent regulations may dent the company’s financials in the upcoming quarters.

TD Ameritrade’s shares gained around 44.9% over the last one year, as against 37.0% growth recorded by the industry it belongs to.

At present, TD Ameritrade carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other investment brokers, Interactive Brokers Group, Inc.’s IBKR Electronic Brokerage segment reported a year-over-year increase in Daily Average Revenue Trades (DARTs) for Jul 2017. Total client DARTs were 694,000, up 15% from Jul 2016. Similarly, DARTs were up 2% from the prior month. Also, total customer accounts increased 21% year over year and 2% from the prior month to 436,000.

The Charles Schwab Corporation SCHW is expected to report its monthly metrics later this week.

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