Brokers On Line - gz
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By: GZ on Lunedì 16 Settembre 2002 23:31
Stock:
Ameritrade,
Interactive Brokers,
TradeStation
Lettura consigliata di supporto
Questo pezzo è uscita solo stasera verso le 21:00 italiane è di Moreland, un esperto di insiders : ^www.insiderinsights.com #www.insiderinsights.com^
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Inside Activity
Insiders actually started buying Ameritrade shares a few months ago, but I had more or less discounted the 81,000 shares purchased in June by director Robert Slezak and Vice President Anne Nelson when they were finally recorded at the Securities and Exchange Commission in mid-July. The main reason: I was still bearish on the market then.
However, last month's purchases were harder to dismiss. Insiders bought more than 10 times the amount of shares in August than they did in July, and I had covered my bets against the market. Getting into Ameritrade is only conceivable if you think, as I now do, that U.S. equities are finally ready to act a bit better in the near term.
Even so, I decided to hold off on highlighting Ameritrade until its merger with Datek won approval with both boards. Both parties confirmed the merger just this past week, and they haven't yet given specific guidance, but the deal should prove to be quite beneficial.
The Synergies
Both companies generated similar commission from clients, so customer attrition shouldn't be a problem. (Merged companies often lose clients when pricing structures change.) Moreover, Datek's customers are more frequent traders, averaging 21 trades a month, vs. 12 trades on average for Ameritrade customers. Management thinks the pro forma monthly trading figure will be around 15. At that level, Ameritrade can start rebuilding profits.
In recent months Ameritrade has barely eked out a profit as trading levels stayed in a funk -- but at least it stayed profitable. The company had executed an average of 150,000 trades a day in the first four months of 2000. That metric dropped to just 68,000 by this past June. Tellingly, the figure jumped back up to 82,000 in July, the first sequential rise in five months. Although we'll see a slight dropoff in August, that's typical for that seasonally slow month. Ameritrade should post much more robust figures after that if the market continues to scramble higher. The combined Ameritrade/Datek entity should easily top 120,000 daily trades, and that should provide a great deal of leverage on the high-fixed-cost trading platform.
Investors may also be overlooking one other key data point. Ameritrade added an impressive 17,000 net new customers in July (the last month for which data are available), more than double the number of additions for June. Again, August will likely have been a slow month on the activity front, but the newly combined entity plans an aggressive marketing campaign that should boost the subscriber base.
With Ameritrade's future earnings potential largely a function of market activity, nailing down specific earnings forecasts for the company is difficult. But I do feel that Ameritrade is now positioned to be nicely profitable on a modest upswing in trading volumes. We don't even need to see another bull market trading frenzy for this business model to work. If trading volumes return to a merely normal pace in the coming years, then Ameritrade will likely emerge as one of the strongest -- and most profitable -- of all e-brokers.
Edited by - gz on 9/16/2002 21:41:14
