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New 52-Week High for E*TRADE

Zacks Equity Research

Shares of E*TRADE Financial Corporation (ETFC) touched a new 52-week high of $12.38 during its trading session on Jun 26, reflecting an increase over the previous high of $12.34 reached on Jun 21.

E*TRADE Financial closed the trading day on Jun 26 at $12.24, reflecting a solid year-to-date return of 63.2%. The trading volume for the session was 3.4 million shares. Further upside potential exists for this Zacks Rank #3 (Hold) online brokerage firm as it is evident from the earnings estimate revisions in the last 30 days and expected earnings growth of 247.7% for 2013.

Growth Drivers

E*TRADE Financial recently came out with its monthly activity update for May 2013. Daily Average Revenue Trades (DARTs), representing the number of trades from which brokers can expect commissions or fees, rose 15% to 162,940 compared with the previous month.

Total number of accounts at the end of the month came to about 4.6 million, comprising 3.0 million brokerage accounts, 1.2 million stock plan accounts and 0.4 million banking accounts. Net new brokerage accounts in the month were 15,648 while E*TRADE’s net new brokerage assets were $1.0 billion, up from $0.5 million in the prior month.

For E*TRADE's entire loan portfolio, on a monthly basis, special mention delinquencies decreased 8% and total at-risk delinquencies fell 6%.

The activity update clearly reflects how E*TRADE's performance has improved since the company last reported its results for the quarter ended Mar 31, 2013. DARTs at the end of the quarter were 149,000, up 16% sequentially. Net new brokerage assets were $3.1 billion. Total customer accounts were 4.5 million, including 2.9 million brokerage accounts.

Impressive monthly activity update for May has raised optimism for a better performance ahead by E*TRADE Financial. We currently have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +6.0% for 2013 and +8.1% for 2014.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for E*TRADE Financial increased by 2.0% to 50 cents per share for 2013 and rose 1.6% to 62 cents for 2014.

Other stocks to watch out for in the industry are Investment Technology Group Inc. (ITG) and Ladenburg Thalmann Financial Services Inc. (LTS), each with a Zacks Rank #1 (Strong Buy) while Cowen Group, Inc. (COWN), carries a Zacks Rank #2 (Buy).

Read the Full Research Report on ETFC

Read the Full Research Report on LTS

Read the Full Research Report on COWN

Read the Full Research Report on ITG

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