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E*TRADE's (ETFC) May 2019 DARTs Increase 2% From April

Zacks Equity Research

E*TRADE Financial ETFC has reported a rise in Daily Average Revenue Trades (DARTs) for May. According to its monthly market activity, the company’s DARTs came in at 279,058, up 2% from the previous month and 14% year over year. Notably, derivatives comprised 33% of DARTs in May.

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 largely reflects investors’ willingness 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 14,310 gross new retail accounts for May. 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 $1.3 billion compared with the negative $0.8 billion reported in the last month.

At the end of May, E*TRADE’s customer security holdings were $269.9 billion, up from the $287.6 billion reported in April. The company’s brokerage-related cash came in at $60.5 billion compared with the previous month’s $61.7 billion. In addition, bank-related cash and deposits for the company totaled $5.2 billion, up from $5 billion recorded in the last month.

Peer Performance

Interactive Brokers Group, Inc. IBKR released its Electronic Brokerage segment’s performance metrics for May. Total client DARTs were 894,000, up 15% from April 2019 as well as from May 2018. Total customer accounts inched up 1% from the prior month and 20% from the prior-year month to 638,600.

Charles Schwab’s SCHW total client assets came in at $3.5 trillion, down 4% from the prior month but up 5% from the year-ago period. Client assets receiving ongoing advisory services were $1.85 trillion, down 3% sequentially but up 5% year over year. Schwab’s average interest earning assets were $263.7 billion at the end of May, declining 2% from April 2019 but improving 9% from May 2018 level.

Among others, LPL Financial Holdings Inc. LPLA is expected to release its May monthly activity report 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 3.3%, year to date, compared with 5.3% growth recorded by the industry.



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LPL Financial Holdings Inc. (LPLA) : Free Stock Analysis Report
 
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