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E*TRADE's (ETFC) July 2019 DARTs Increase 1% From June

Zacks Equity Research

E*TRADE Financial ETFC has reported a rise in Daily Average Revenue Trades (DARTs) for July. According to its monthly market activity, the company’s DARTs came in at 255,423, up 1% from the previous month and 5% year over year. Notably, derivatives comprised 35% of DARTs in July.

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, 1.9 million corporate services accounts, and 0.1 million advisor services accounts.

E*TRADE’s total accounts included 9,770 net new accounts for July. Total brokerage accounts highlight the company’s ability to gain and retain customers who trade and invest.

Moreover, E*TRADE’s net new retail assets came in at $0.2 billion compared with the $1.1 billion reported in the last month. Advisor services assets were $0.1 billion.

At the end of July, E*TRADE’s customer security holdings were $289.2 billion, up from the $286.6 billion reported in June. The company’s brokerage-related cash came in at $63.1 billion compared with the previous month’s $62.2 billion. In addition, bank-related cash and deposits for the company totaled $9.1 billion, up from the $8.6 billion recorded in the last month.

Peer Performance

Interactive Brokers Group, Inc. IBKR has released its Electronic Brokerage segment’s performance metrics for July. The segment reported a sequential decline in DARTs. Total client DARTs were 800,000, down 1% from June 2019 but up 7% from July 2018. Total customer accounts inched up 1% from the prior month and 17% from the prior-year month to 652,100.

Charles Schwab’s SCHW total client assets came in at $3.75 trillion, up 8% from the prior month and 1% from the year-ago period. Client assets receiving ongoing advisory services were $1.96 trillion, up 8% sequentially and 1% year over year. Schwab’s average interest earning assets were $264 billion at the end of July, in line with June 2019, but were up 4% from the July 2018 level.

Among others, LPL Financial Holdings Inc. LPLA is expected to release its July monthly activity report earlier next 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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company’s shares have lost around nearly 8.3%, year to date, compared with the 1.6% decline recorded by the industry.

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