E*TRADE Financial November DARTs Up 15% From Prior Month

E*TRADE Financial Corporation (NASDAQ:ETFC) reported a rise in Daily Average Revenue Trades (DARTs) for November 2017. According to its monthly market activity, the company’s DARTs came in at 248,669, up 15% from the prior month and 19% year over year. Notably, derivatives comprised 31% of DARTs during November.

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 month under review, E*TRADE’s total number of accounts were approximately 5.4 million, comprising about 3.6 million brokerage accounts, 1.5 million stock plan accounts and 0.3 million banking accounts.

For the reported month, E*TRADE’s total brokerage accounts included 41,473 gross new brokerage accounts. Total brokerage accounts highlight the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new brokerage assets came in at $1.5 billion compared with $0.6 billion recorded in the prior month.

At the end of November 2017, E*TRADE’s customer security holdings were $285.3 billion, up from $278.5 billion reported in October 2017. The company’s brokerage-related cash increased 1% to $53.1 billion from $52.8 billion in the prior month, with customers being the net buyers of about $1.6 billion in securities. In addition, bank-related cash and deposits for the company totaled $5 billion, in line with the previous month.

Peer Performance

Interactive Brokers Group, Inc.’s (NASDAQ:IBKR) Electronic Brokerage segment reported a year-over-year increase in DARTs for November 2017. Total client DARTs came in at 795,000 — up 9% from November 2016 and 14% from October 2017. Also, total customer accounts jumped 25% year over year and 2% from the prior month to 474,000.

The Charles Schwab Corporation (NYSE:SCHW) released the monthly activity report for November 2017, which shows an improvement from the year-ago period. Total client assets were $3.3 trillion at the end of the month, climbing 21% year over year.

Among others, TD Ameritrade Holding Corporation (NASDAQ:AMTD) is expected to release November monthly activity report earlier next week.

Our Viewpoint

Growth in DARTs and new brokerage accounts will prove to be beneficial for the company. We, however, are concerned about the uncertain macroeconomic environment, which might lead to lesser trading activities.

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 gained 30.7% over the last six months compared with 18.7% recorded by the industry.

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E*TRADE Financial Corporation (ETFC): Free Stock Analysis Report

The Charles Schwab Corporation (SCHW): Free Stock Analysis Report

Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report

TD Ameritrade Holding Corporation (AMTD): Free Stock Analysis Report

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