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TD Ameritrade (AMTD) Remains on Track in Asset Gathering

On Aug 22, 2014, we issued an updated research report on TD Ameritrade Holding Corporation (AMTD). This Nebraska-based investment brokerage firm has been diligently making effort to keep up its asset gathering momentum over the past few years.

In fiscal third-quarter 2014 (ended Jun 2014), TD Ameritrade’s net new client assets grew 24.1% year over year to $13.4 billion. Further, for the nine months ended Jun 2014, net new client assets increased 1.5% to $40 billion. Management noted that if the company can sustain the growth trend in the fourth quarter, fiscal 2014 will mark the sixth consecutive year of double-digit asset growth.

Further, TD Ameritrade remains optimistic about its independent advisory platform. According to a McKinsey report, 60% of net flows into the $15 trillion U.S. wealth management market is expected to come through either the discount brokers channel or the independent registered investment advisors (:RIA) channel in the coming four years. We believe that the company is well positioned to benefit from the overall favorable trend in the industry.

Investors’ re-engagement and bullish stance on equity markets have helped Ameritrade’s average client trades per day to witness a steady rise since the first quarter of fiscal 2013. This trend continued during the 9 months ended Jun 2014 with average client trades per day increasing 17.3% year over year to 435,123. We believe that TD Ameritrade will be able to increase trading volumes in the near term as well based on the continued improvement in equity markets and benefits from its innovative trading platforms.

Nevertheless, concern arises with declining net interest margin, lack of geographical expansion that limits growth prospects and the prevailing stringent regulatory landscape.

Analysts’ mixed stance on the stock was reflected in the estimate revisions over the past 30 days. For 2014, the Zacks Consensus Estimate advanced nearly 1% to $1.40 per share while it remained unchanged at $1.62 cents for 2015.

TD Ameritrade currently carries a Zacks Rank #3 (Hold).

Stocks that Warrant a Look

Arlington Asset Investment Corp. (AI), Moelis & Company (MC) and Piper Jaffray Companies (PJC) are among the better-ranked stocks in this space. All these stocks hold a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on AMTD
Read the Full Research Report on MC
Read the Full Research Report on PJC
Read the Full Research Report on AI


Zacks Investment Research