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TD Ameritrade (AMTD) October Daily Client Trades Up 55% Y/Y


TD Ameritrade Holding Corporation AMTD, online brokerage firm headquartered at Omaha, NE, reported average client trades per day of 680,000 in its activity report for October 2017. The reported figure was up 19% from the prior-month tally and 55% from the year-ago period.

Following the uptrend in metrics, shares of TD Ameritrade inched up around 1%.

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 Oct 31, 2017, TD Ameritrade reported $1.14 trillion in total client assets, up 2% from the previous month and 49% year over year. Average fee-based balances came in at $217.7 billion, up 5% from the prior month and 29% from the year-ago period. Average spread-based balance of $150.9 billion was up 14% from the last month and 31% year over year.

Improved Quarterly Performance

During fourth-quarter fiscal 2017 (ended Sep 30, 2017), average client trades per day increased 19% year over year to 527,741.

As of Sep 30, 2017, net new client assets totaled $20 billion, up 31.8% year over year. Total client assets came in at $1,118.5 billion, surging 44.6% year over year.

Average spread-based balance was $121.7 billion, jumping 9.7% year over year. Average fee-based investment balance was up 18.2% to $199.8 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 its 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 October 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 hurt the company’s financials in the upcoming quarters.

TD Ameritrade’s shares gained around 29.8% over the last one year, as against 16.4% growth recorded by the industry.

At present, TD Ameritrade sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank 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 October 2017. Total client DARTs came in at 698,000, up 16% from both October 2016 and September 2017. Also, total customer accounts jumped 24% year over year and 2% from the prior month to 465,000.

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

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