For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Interactive Brokers Group, Inc. (IBKR) ten years ago? It may not have been easy to hold on to IBKR for all that time, but if you did, how much would your investment be worth today?
Interactive Brokers Group, Inc.'s Business In-Depth
With that in mind, let's take a look at Interactive Brokers Group, Inc.'s main business drivers.
Incorporated in 1977 and headquartered in Greenwich, CT, Interactive Brokers Group Inc. operates as an automated global electronic market maker and broker. The company specializes in routing orders, besides executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on more than 135 electronic exchanges and market centers worldwide.
In the United States, Interactive Brokers conducts its business primarily from Greenwich and Chicago. Across the globe, it conducts business through offices in Canada, the U.K., Ireland, Luxembourg, Switzerland, Hungary, India, China (Hong Kong and Shanghai), Japan, Singapore, and Australia.
Since 2017, the company has been working continuously to wind down its Market Making segment and focus more on the Electronic Brokerage segment. In April 2020, Interactive Brokers announced that its market making activities were almost insignificant and hence decided not to report its operations through two separate segments.
Prior to its IPO in 2007, Interactive Brokers conducted business through a limited liability company (LLC) structure. In connection with the IPO, the company purchased 10.0% of the membership interest in IBG LLC. As of Jun 30, 2022, Interactive Brokers’ primary assets were its ownership of 23.5% of the membership interests in IBG LLC. The remaining 76.5% of the membership interests were held by IBG Holdings LLC.
As of Jun 30, 2022, Interactive Brokers had $113.3 billion in total assets, $2.9 billion in cash and cash equivalents and $10.6 billion in total equity.
As of the same date, Interactive Brokers’ total customer accounts were 1,92 million and total customer Daily Average Revenue Trades (DARTs) was 2.17 million.
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Interactive Brokers Group, Inc. ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in August 2012 would be worth $4,325.05, or a gain of 332.51%, as of August 4, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 198.72% and gold's return of 6.70% over the same time frame.
Going forward, analysts are expecting more upside for IBKR.
Shares of Interactive Brokers have outperformed the industry over the past year. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters. Its second-quarter 2022 results reflect a fall in revenues and higher expenses. The company’s continued efforts to develop proprietary software, low compensation expenses relative to net revenues and an increase in emerging market customers will likely keep supporting financials in the upcoming quarters. While persistently increasing expenses (owing to technology upgrades and investments in franchise) are expected to hurt Interactive Brokers' profits, the buyout of the retail unit of Folio Investments will strengthen the company's position in the online brokerage space. The company is also expected to keep benefiting from higher interest rates in the upcoming quarters.
The stock is up 6.28% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2022. The consensus estimate has moved up as well.
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