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TD Ameritrade shares up on asset growth

The Associated Press

TD Ameritrade Holding Corp. shares jumped Tuesday after the online brokerage's CEO championed the company's growth potential.

THE SPARK: TD Ameritrade's President and CEO Fred Tomczyk, speaking a Barclays conference, said he expects to report by next month that the company's new client assets have risen at double-digit rates for the fifth consecutive year, excluding the effect of rising or dropping markets.

THE BIG PICTURE: TD Ameritrade, based in Omaha, Neb., is the largest online U.S. broker as measured by client trades. It makes money from trading commissions and generates revenue from assets it holds for clients and fees for advice. The current low interest rates have limited how much Ameritrade has earned from those asset-based fees. But the company said Tuesday that it stands to benefit when interest rates rise.

THE ANALYSIS: Citi analyst William Katz kept a "Buy" rating on the company's stock, saying there are signs of a pick-up in trading trends. Katz has a target price of $41 on the company's stock.

SHARE ACTION: Ameritrade shares closed up 95 cents at $27.71, a 3.6 percent gain. Its stock is nearing the top of its 52-week trading range of $15.14 to $27.88.