Charles Schwab Corporation (NASDAQ: SCHW) is
a leading provider of financial services, with more than 300 offices, 7.3 million client brokerage accounts, 1.3 million corporate retirement plan participants, 355,000 banking accounts, and $1.4 trillion in client assets. The company provides a full range of securities brokerage, money management and financial advisory services to individual investors and independent investment advisors. The Charles Schwab Bank provides banking and mortgage services. President and COO Walter Bettinger took the CEO reins from founder Charles Schwab this week. Schwab remains executive chairman.
Last week, the company presented its Q2 report. Earnings of 27 cents per share and revenues of $1.31 billion topped Street estimates 26 cents per share and $1.30 billion. Clients brought $26 billion in net new assets to the firm. Active brokerage accounts and retirement plan participants were up 5% and 13% from year-earlier levels and banking accounts more than doubled.
SCHW shares
popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with five "strong buys", four "buys", eight "holds" and one "sell". Analysts see a 20% average annual growth rate, through the next five years. The SCHW PEG ratio (1.08), EPS Growth rate (17.39%), Operating Margin (38.27%), Net Profit Margin (23.10%), Return on Investment (13.11%) and Return on Equity (27.99%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 65% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past 52 weeks, it has traded between $17.41 and $25.72. A stop-loss of $19.60 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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Reader Comments (Page 1 of 1)
7-24-2008 @ 3:35PM
Kent said...
This article affirms my earlier recollection from reading about SHWB's ability to perform profitably over and above the fray of the current banking crisis among small and mega-financial instutions. It is a remarkable testament to their management who uncannily displayed fudiciary responsibility and discipline from the temptations of windfall profit schemes that most banks and investment houses fell victim to. I will study them more carefully to see if I should have them handle some of my financial assets.