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E*TRADE's (ETFC) April 2020 DARTs Increase 3% 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 927,671, up 3% from the previous month and more than 200% year over year. Notably, derivatives comprised 25% of DARTs in the reported month.

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 primarily reflects investors’ willingness to invest in equity markets.

At the end of the reported month, E*TRADE’s total number of accounts were 7.7 million, comprising 5.6 million retail accounts, 2 million corporate services accounts, and 0.1 million advisor services accounts.

E*TRADE’s total accounts included 138,409 net new accounts for April. The total number of brokerage accounts highlights the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new retail assets came in at $5 billion compared with the $11 billion reported in the last month. There were no net new advisor service assets.

At the end of April, E*TRADE’s customer security holdings were $289.8 billion, up from the $253.2 billion witnessed in March. The company’s brokerage-related cash came in at $86.5 billion compared with the previous month’s $84.6 billion. Additionally, on-balance sheet customer cash and deposits for the company totaled $56 billion compared with the $58.1 billion recorded in March.

Peer Performance

Interactive Brokers Group IBKR released the Electronic Brokerage segment’s performance metrics for April 2020. The segment reported a substantial surge in DARTs on a year-over-year basis. This was attributed to a rise in trading activities owing to concerns over the coronavirus outbreak. Total client DARTs were 1,720,000, surging 121% from April 2019 but declining 12% from March 2020.

The Charles Schwab Corporation SCHW has reported the monthly activity report for April, which shows decent results compared with the prior month. Net new assets of $15.3 billion plummeted 45% from the previous month. Total client assets came in at $3.8 trillion, up 8% from the prior month and 3% from the year-ago month.

Among other discount brokers, LPL Financial Holdings Inc. LPLA is likely to report monthly performance metrics in the coming days.

Our Viewpoint

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

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 lost 12.2% in the last three months compared with the industry’s decline of 29.7%.

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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
ETRADE Financial Corporation (ETFC) : Free Stock Analysis Report
The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report
LPL Financial Holdings Inc. (LPLA) : Free Stock Analysis Report
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