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TD Ameritrade Hits New 52-Week High

Zacks Equity Research

Shares of TD Ameritrade Holding Corporation (AMTD) attained a new 52-week high, touching $27.88 on Aug 5. The closing price of this online brokerage firm reflects a solid year-to-date return of 60.2%. The trading volume for the session was 3.3 million shares.

Despite the strong price appreciation, this Zacks Rank #1 (Strong Buy) stock has plenty of upside left, given its strong estimate revisions over the last 60 days as well as expected year-over-year earnings growth of 12.0% for 2013.

Growth Drivers

Impressive fiscal third-quarter 2013 results – including a healthy balance sheet and solid capital position – have been the primary growth drivers for TD Ameritrade.

On Jul 23, TD Ameritrade’s fiscal third-quarter 2013 earnings came in at 33 cents per share, beating the Zacks Consensus Estimate by 6.5%. The quarterly results were driven by a rise in revenues. Further, increases in both total client assets and daily average client trades were the positives.

Additionally, TD Ameritrade has delivered positive earnings surprises for 3 out of the last 4 quarters with an average beat of 7.7%.

Further, the company’s association with The Toronto-Dominion Bank (TD) provides an opportunity to cross-sell its products. This is expected to be a significant growth driver for TD Ameritrade’s organic assets.

Innovations in online trading, long-term investment in products and services, delivery of advanced customer service, creative as well as cost-effective marketing and sales, along with prudent expense management are the key factors driving TD Ameritrade’s strategy of boosting its trading and investing business. However, a low interest rate environment and stringent regulations will likely be dampeners.

Estimate Revisions Show Potency

For TD Ameritrade, over the last 30 days, 10 of the 11 estimates for 2013 have been revised upward, raising the Zacks Consensus Estimate by 6.3% to $1.19 per share. For 2014, 10 of the 12 estimates moved north over the same time frame, raising the Zacks Consensus Estimate by 6.5% to $1.31 per share.

Other financial stocks that are worth considering include Enterprise Financial Services Corp. (EFSC) and First Interstate Bancsystem Inc. (FIBK). Both of them carry the same Zacks Rank as TD Ameritrade.

Read the Full Research Report on AMTD

Read the Full Research Report on TD

Read the Full Research Report on FIBK

Read the Full Research Report on EFSC

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