E*TRADE Financial (ETFC) October DARTs Up 7% Sequentially

E*TRADE Financial Corporation ETFC reported an increase in Daily Average Revenue Trades (DARTs) for October 2017. According to its monthly market activity, the company’s DARTs came in at 215,689, up 7% from the prior month and 28% year over year. Notably, derivatives comprised 31% of DARTs during October.

Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees. The rise 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 5.4 million, comprising about 3.6 million brokerage accounts, 1.5 million stock plan accounts and 0.3 million banking accounts.

For the reported month, E*TRADE’s total brokerage accounts included 37,636 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 came in at $0.6 billion compared with $1 billion recorded in the prior month.

At the end of October, E*TRADE’s customer security holdings were $278.5 billion, up from $270.1 billion in September. The company’s brokerage-related cash rose marginally to $52.8 billion from $52.3 billion in the prior month, with customers being the net buyers of about $0.1 billion in securities. In addition, bank-related cash and deposits for the company totaled $5 billion, flat sequentially.

Peer Performance

Among other investment brokers, Interactive Brokers Group’s IBKR Electronic Brokerage segment reported a year-over-year increase in DARTs for October. The segment deals in clearance and settlement of trades for individual and institutional clients globally.

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. The reported figure was up 19% from the prior-month tally and 55% from the year-ago period.

The Charles Schwab Corporation SCHW released monthly activity report for October, which shows an improvement fromthe year-ago period. Total client assets were $3.3 trillion at the end of the month, up 21% year over year. Further, client assets receiving ongoing advisory services were $1.64 trillion, up 21% 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 lesser trading activities.

E*TRADE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have gained 26.6% year to date, outperforming 7% rally for the industry it belongs to.

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