TD Ameritrade (AMTD) April Daily Client Trades Rise 7% Y/Y

Omaha, NE-based online brokerage firm, TD Ameritrade Holding Corporation (TO:TD) reported average client trades per day of 502,000 in its activity report for Apr 2017. The reported figure was flat with the prior-month tally and increased 7% 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 Apr 30, 2017, TD Ameritrade reported $858 billion in total client assets, up 1% from the prior month and 19% year over year. Average fee-based balances were $186.2 billion, up 1% from the prior month and 15% from the year-ago period. Average spread-based balance of $118.8 billion was down 1% from the prior month, but up 12% year over year.

Improved Quarterly Performance

During second-quarter fiscal 2017 (ended Mar 31, 2017), average client trades per day increased 2% year over year to 517,000.

As of Mar 31, 2017, net new client assets totaled $19.5 billion, up 38.3% year over year. Total client assets came in at $847 billion, up 19% year over year.

Average spread-based balance was $119.7 billion, jumping 13.1% year over year, and average fee-based investment balance was up 17.8%, to $180.4 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 (TO:TD) provides an opportunity to cross sell its products. This is expected 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 anticipated 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 hurt the company’s financials in the upcoming quarters.

TD Ameritrade shares gained around 6.5% over the last six months, as against 7.7% gain in the Zacks categorized Investment Bank industry.

At present, TD Ameritrade carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Among other investment brokers, Interactive Brokers Group, Inc.’s (NASDAQ:IBKR) Electronic Brokerage segment reported a year-over-year decline in Daily Average Revenue Trades (DARTs) for Apr 2017. Total client DARTs were 645,000, down 3% from Apr 2016. Also, DARTs were marginally down from the previous month. However, total customer accounts were up 18% year over year and 1% from the prior month to 411,000.

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

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