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E*TRADE's (ETFC) February DARTs & New Brokerage Assets Rise

Zacks Equity Research

E*TRADE Financial ETFC reported monthly market activity for February 2019. Daily Average Revenue Trades (DARTs) for the month were 298,395, up 6% from the previous month but down 10% year over year. Derivatives comprised 30% of DARTs in February.

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

At the end of the month under review, E*TRADE’s total number of accounts were 7 million, comprising 4.9 million brokerage accounts, 1.8 million stock plan accounts and 0.3 million banking accounts.

For the reported month, E*TRADE’s total brokerage accounts included 54,706 gross new brokerage accounts. Total brokerage accounts highlight the company’s ability to gain and retain customers who trade and invest.

E*TRADE’s net new brokerage assets were $1.3 billion, up 86% from the prior month but down 35% year over year.

At the end of February 2019, E*TRADE’s customer security holdings were $363.1 billion, up 4% from January 2019 and 21% from February 2018 levels. The company’s brokerage-related cash increased 1% from the previous month and 2% from February 2018 to $54.3 billion. In addition, bank-related cash and deposits for the company totaled $7 billion, up 9% from the last month and 43% year over year.

Our Take

The uncertain macroeconomic environment will likely lead to lower trading activities, which might hamper growth in DARTs and new brokerage accounts. However, restructuring measures and balance-sheet growth plans along with higher interest rates will prove beneficial for the company.

The company’s shares have gained around 10.4% over the past three months compared with 9% growth recorded by the industry it belongs to.



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.

Peer Performance and Upcoming Releases

Interactive Brokers Group, Inc.’s IBKR Electronic Brokerage segment reported a year-over-year decrease in DARTs for February 2019. Total client DARTs were 824,000, down 19% from February 2018 and 3% from January 2019.

Notably, Charles Schwab SCHW and LPL Financial Holdings Inc. LPLA are expected to release monthly activity reports for February soon.

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