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E*TRADE's (ETFC) April 2019 DARTs Decrease 5% From March

Zacks Equity Research

E*TRADE Financial ETFC has reported a rise in Daily Average Revenue Trades (DARTs) for April. According to its monthly market activity, the company’s DARTs came in at 272,858, down 5% from the previous month, but up 13% year over year. Notably, derivatives comprised 32% of DARTs in April.

Broker performance is generally measured through DARTs that represent the number of trades from which brokers can expect commission or fees. The drop in DARTs largely reflects investors’ reluctance to invest in equity markets.

At the end of the reported month, E*TRADE’s total number of accounts were approximately 7.1 million, comprising about 5.1 million retail accounts, 1.8 million corporate services accounts and 0.2 million advisor services accounts.

E*TRADE’s total accounts included 1,219 gross new retail accounts for April. Total brokerage accounts highlight the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new retail and advisor services assets came in at negative $0.8 billion compared with $1.7 billion recorded in the last month.

At the end of April, E*TRADE’s customer security holdings were $287.6 billion, up from the $279.3 billion reported in March. The company’s brokerage-related cash remained flat at $61.7 billion compared with the previous month. In addition, bank-related cash and deposits for the company totaled $5 billion, up from $4.8 billion recorded in the last month.

Peer Performance

Interactive Brokers Group, Inc.’s IBKR Electronic Brokerage segment reported a year-over-year rise in DARTs for April 2019. Total client DARTs came in at 778,000, decreasing 4% from April 2018 and 10% from March 2019. Total customer accounts grew 20% year over year and 1% from the prior month to 631,000.

The Charles Schwab Corporation’s SCHW monthly activity for April reflects year-over-year improvement. Total client assets came in at $3.7 trillion at the end of the month, increasing 11% from the year-ago quarter. Furthermore, net brokerage accounts were 147,000, up 4% year over year.

Among others, LPL Financial Holdings Inc. LPLA is expected to release April monthly activity reports later this week.

Our Viewpoint

Though the uncertain macroeconomic environment might lead to lesser trading activities, growth in DARTs and new brokerage accounts will prove beneficial for the company.

E*TRADE currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have gained around nearly 10.5%, year to date, compared with 8.1% growth recorded by the industry.

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The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
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E*TRADE Financial Corporation (ETFC) : Free Stock Analysis Report
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