Analyst Upgrades

• Siemens (SI) to buy from hold at Deutsche Bank.
• Diamond Offshore (DO) to market perform from underperform at FBR Capital.
• MeadWestvaco (MWV) to conviction buy from neutral at Goldman.
• TD AmeriTrade (AMTD) and Cabot Oil & Gas (COG) to buy from neutral at BofA/Merrill.
• Janus Capital (JNS) to hold from sell at Citigroup.
• Motorola Mobility (MMI) to buy from neutral at UBS.
• Frontier Communications (FTR) to neutral from underperform at Macquarie.
• Humana (HUM) to buy from hold at Argus.

Continue reading Analyst Calls: AMTD, COG, DO, F, GM, HUM, LEA, MMI, NKE, SI, TRW ...

Analyst Calls: AMTD, COG, DO, F, GM, HUM, LEA, MMI, NKE, SI, TRW ... originally appeared on BloggingStocks on Fri, 18 Mar 2011 11:20:00 EST. Please see our terms for use of feeds.

Analyst Upgrades

• Intel (INTC), ON Semiconductor (ONNN), Lattice Semiconductor (LSCC), Fairchild Semiconductor (FSC), STMicroelectronics (STM) and Altera (ALTR) to outperform from neutral at RW Baird.
• Capital One (COF) to overweight from equal weight at Morgan Stanley.
• Dollar Tree (DLTR) to buy from neutral at Goldman.
• Foot Locker (FL) to buy from neutral at Sterne Agee.
• Progressive (PGR) to buy from neutral at BofA/Merrill.
• Flow International (FLOW) to buy from neutral at Roth Capital.
• Signature Bank (SBNY) to buy from hold at Jefferies.
• HiSoft Technology (HSFT) to buy from neutral at UBS.

Continue reading Analyst Calls: AMTD, C, COF, DLTR, FL, GS, IBM, INTC, NYT, PGR, SCHW ...

Analyst Calls: AMTD, C, COF, DLTR, FL, GS, IBM, INTC, NYT, PGR, SCHW ... originally appeared on BloggingStocks on Fri, 04 Mar 2011 11:40:00 EST. Please see our terms for use of feeds.

Analyst Upgrades

• General Growth (GGP) to outperform from neutral at Credit Suisse.
• PPL Corp. (PPL) to outperform from market perform at FBR Capital.
• Hudson City Bancorp (HCBK) to neutral from reduce at Nomura.
• Hologic (HOLX) to conviction buy from buy at Goldman.
• Cognex (CGNX) to overweight from neutral at Piper Jaffray.
• Buckeye Partners (BPL) to outperform from market perform at Wells Fargo.
• Ericsson (ERIC) and Health Care REIT (HCN) to buy from neutral and Olin (OLN) to neutral from sell at UBS.
• Nalco (NLC) to overweight from neutral at JPMorgan.
• Watts Water (WTS) to buy from hold at BB&T.
• McDermott (MDR) to buy from neutral at Pritchard.

Continue reading Analyst Calls: AMTD, BPL, BX, ERIC, FTE, GGP, HCBK, HCN, NE, PPL, TUP ...

Analyst Calls: AMTD, BPL, BX, ERIC, FTE, GGP, HCBK, HCN, NE, PPL, TUP ... originally appeared on BloggingStocks on Thu, 03 Mar 2011 11:20:00 EST. Please see our terms for use of feeds.

Two weeks ago I decided to sell my shares of E*Trade (ETFC) after concluding it did not fit my investment criteria. It was one of my successful picks for 2010 and I made money having sold puts establishing a base price of $13.50. It closed Friday February 25 at $15.89.

I might not have chosen to post about this except for news that Ken Griffin's hedge fund Citadel Investment Group plans to sell much of its stake in E*Trade Financial. The largest shareholder selling out is news. Citadel will still hold valuable warrants, giving it the option of taking a very large position again, but for now there seems to be a change of heart for them as well.

Continue reading Chasing Value: Time to Sell E*Trade?

Chasing Value: Time to Sell E*Trade? originally appeared on BloggingStocks on Sun, 27 Feb 2011 13:40:00 EST. Please see our terms for use of feeds.

Ameritrade (AMTD) is an online brokerage that allows individual investors to trade equities, options and other securities. Ameritrade also offers money market account services to clients through TD Bank USA. It competes with other online brokerages and financial services firms like E-Trade (ETFC), Charles Schwab (SCHW), Wells Fargo (WFC) and Bank of America (BAC).

Following results we have updated our price estimate to $22.65. The company's shares are currently trading at a discount of almost 10% to our estimate. We believe that the biggest contributing factor to the difference in prices is the outlook for Ameritrade's earnings from money market deposit accounts.

Understanding Money Market Deposit Accounts

A money market deposit account is like a savings bank account where clients deposit money and in earn a slightly higher interest rate on it. Account holders can typically make a few transactions a month that are free and are governed by a slightly different set regulations and rules.

MMDAs became a source of revenue for Ameritrade in 2006 resulting from an agreement with TD Bank USA. This agreement was inked as a part of Ameritrade's acquisition of TD Waterhouse in January 2006. Prior to 2006, interest revenues for Ameritrade were a significantly smaller part of the total revenues and included interest earned on the cash and securities that clients deposit with Ameritrade in order to trade online.

Contribution of MMDAs to Ameritrade's Value

Ameritrade receives a fee from TD Bank for providing marketing, record keeping and support services for their money market deposit accounts. The fee is based on the yield earned on the client assets less the actual interest paid to clients, a flat fee to the banks of 25 basis points and the cost of FDIC insurance premiums. It is also a high margin service as Ameritrade enjoys EBITDA margins as high as 50% from MMDA services.

The net yield for Ameritrade from an MMDA was as high as 4% in early 2008, before it fell to under 2% in 2009. We believe that the interest rate will gradually increase over the years to reach the highs it achieved in the pre-recessionary years. Moreover, the increasing popularity of an MMDA over normal savings account among clients due to the higher interest offered is also a significant draw for Ameritrade.

In 2008-2010, Ameritrade migrated client cash held in client credit balances and money market mutual funds into money market account offerings. The total balance in these money market accounts with Ameritrade almost doubled each year during this time period. Going forward, we expect the balance in these accounts to grow by at least 5% annually.

The estimated values of MMDA yields and client balances likely contribute to as much 42% of Ameritrade's share. You can modify the forecast above to see how they impact Ameritrade's price estimate.

You can see the complete $22.65 Trefis price estimate for Ameritrade's stock here.

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.

Money Markets Are Ameritrade's Biggest Revenue Source originally appeared on BloggingStocks on Thu, 17 Feb 2011 14:40:00 EST. Please see our terms for use of feeds.

Rumor has it -- again -- that dot.bomb era survivor E*Trade (ETFC) may be acquired by none other than Charles Schwab Corp. (SCHW) for an initial offer of $24 a share. This chatter moved the stock price marginally Friday up 72 cents to $15.27. Although as of Monday morning the rumors are unsubstantiated, trading in stock options has heated up on the call side.

Bantering about the inevitable acquisition of E*Trade has been an annual pastime on and off for the past 10 years, but they resurfaced again in earnest after the financial crisis creamed most companies and institutions. E*Trade is currently capitalized at $3.37 billion. If the rumors bear fruit, the Schwab offer represents approximately a 60% premium to the current price.

Continue reading Chasing Value: E*Trade Schwab Buyout Rumors

Chasing Value: E*Trade Schwab Buyout Rumors originally appeared on BloggingStocks on Mon, 27 Sep 2010 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Is TD Ameritrade Set to Rally?

Is TD Ameritrade Set to Rally? originally appeared on BloggingStocks on Mon, 20 Sep 2010 09:00:00 EST. Please see our terms for use of feeds.

TD Ameritrade (AMTD), a broker whose competitors include Charles Schwab (SCHW) and E*Trade (ETFC), closed Wednesday's session higher by 2%. The final quote came in at $14.93. That's not too far from the 52-week low of $14.53. The twelve-month range is a narrow one, as the 52-week high is $21.30.

Is the stock a trade? An investment? Indeed, you may be thinking that it's time to buy. Some things worry me, however. The one-year chart isn't attractive at all. Well, in one sense it is, because a trader/investor would be buying low at this point.

Continue reading TD Ameritrade: How Does the Stock Look?

TD Ameritrade: How Does the Stock Look? originally appeared on BloggingStocks on Thu, 02 Sep 2010 09:00:00 EST. Please see our terms for use of feeds.

E*Trade (ETFC), an online broker whose colleagues include Charles Schwab (SCHW) and TD Ameritrade (AMTD), is a low-priced stock. It closed on Wednesday at $1.82, representing a rise of 2.8%; the move was backed by strong volume. The company reported first-quarter earnings yesterday after the bell. What should we make of the results?

According to MarketWatch, things seem to be improving. A loss of 2 cents per share compared very favorably to the loss of 41 cents per share booked in the year-ago period. As for estimates, the analysts were thinking that a loss of 3 cents per share was in the offing.

Continue reading E-Trade Still Speculative After Q1

E-Trade Still Speculative After Q1 originally appeared on BloggingStocks on Thu, 22 Apr 2010 09:30:00 EST. Please see our terms for use of feeds.

Continue reading TD Ameritrade Gives More-of-the-Same Q2 Outlook

TD Ameritrade Gives More-of-the-Same Q2 Outlook originally appeared on BloggingStocks on Wed, 17 Mar 2010 14:00:00 EST. Please see our terms for use of feeds.

Here are some highlights from this past week's earnings coverage on BloggingStocks:

• Advanced Micro Devices Inc. (AMD) shares declined despite an earnings beat and a positive outlook
• Bank of America Corp. (BAC) reported that its Q4 loss widened more than expected by Wall Street.
• Capital One Financial Corp. (COF) reported better-than-expected earnings but shares declined.
• Colgate-Palmolive Co. (CL) is seen as on-track to record double-digit earnings growth in 2010.
• Cree Inc. (CREE) strong earnings and revenue growth sent shares to a new 52-week high.

Continue reading Earnings Highlights: Colgate, eBay, Goldman Sachs, Kimberley-Clark, Starbucks ...

Earnings Highlights: Colgate, eBay, Goldman Sachs, Kimberley-Clark, Starbucks ... originally appeared on BloggingStocks on Sat, 23 Jan 2010 12:10:00 EST. Please see our terms for use of feeds.

TD Ameritrade Holding Corporation (AMTD) didn't experience a spectacular start to its new fiscal year. The broker, which competes with Charles Schwab (SCHW) and E*Trade Financial Corporation (ETFC), was hampered by a decline in trading activities.

According to the press release, revenues increased a modest 2% from the year-ago period. On a sequential basis, the top line actually contracted. Net income decreased 26% to 23 cents per share. Earnings.com indicates an expectation of 26 cents per share. Margins and profitability metrics unfortunately were down across the board.

Continue reading TD Ameritrade's Q1 Worthy of a Trade?

TD Ameritrade's Q1 Worthy of a Trade? originally appeared on BloggingStocks on Tue, 19 Jan 2010 18:00:00 EST. Please see our terms for use of feeds.

Continue reading Chasing Value: E-Trade, a word of caution

Chasing Value: E-Trade, a word of caution originally appeared on BloggingStocks on Fri, 20 Nov 2009 13:40:00 EST. Please see our terms for use of feeds.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• Aetna Inc. (NYSE: AET) reported better-than-expected Q3 earnings and revenue, sending shares higher.
• Allergan Inc. (NYSE: AGN) reported better-than-expected Q3 numbers, sending shares higher.
• Bare Escentuals Inc. (NASDAQ: BARE) Q3 profit easily topped analysts' estimates, and shares surged.
• Cabot Oil & Gas Corp. (NYSE: COG) received an upgrade following the release of its Q3 numbers.
• Estee Lauder Companies Inc. (NYSE: EL) reported strong Q1 results, sending shares higher.
• E*Trade Financial Corp. (NASDAQ: ETFC) reported a smaller-than-expected net loss for Q3.
• Goodyear Tire & Rubber Co. (NYSE: GT) Q3 earnings topped estimates and revenue was up sequentially.

Continue reading Earnings highlights: Aetna, Allergan, E*Trade, Goodyear, RadioShack, SAP, Visa ...

Earnings highlights: Aetna, Allergan, E*Trade, Goodyear, RadioShack, SAP, Visa ... originally appeared on BloggingStocks on Sat, 31 Oct 2009 16:10:00 EST. Please see our terms for use of feeds.

E*Trade (NASDAQ: ETFC) is a well-known brand in the broker space. It competes vigorously with the other giants, TD Ameritrade (NASDAQ: AMTD) and Charles Schwab (NASDAQ: SCHW). To be honest, if I were looking for investment ideas in this sector, I would probably begin my search with the latter two. It's difficult to put E*Trade on the list. The company got in trouble during the financial crisis because it was exposed to the mortgage industry. It has now become, in my opinion, a speculative play on a return to glory.

The latest earnings report shows what I'm talking about. For the third quarter, E*Trade lost, on a GAAP basis, 66 cents per share from continuing operations, wider than the year-ago loss of 60 cents per share from continuing operations. After adjusting for an item related to debt extinguishment, the current red ink is equal to 5 cents per share.

Continue reading E*Trade loses less than expected in third quarter -- is this a victory?

E*Trade loses less than expected in third quarter -- is this a victory? originally appeared on BloggingStocks on Wed, 28 Oct 2009 15:45:00 EST. Please see our terms for use of feeds.

Continue reading TD Ameritrade earnings drop but tops expectations

TD Ameritrade earnings drop but tops expectations originally appeared on BloggingStocks on Tue, 27 Oct 2009 10:00:00 EST. Please see our terms for use of feeds.

The brokerage reported a Q1 loss that was wider than the year-ago number. E*Trade lost 41 cents per share versus a loss of 20 cents per share in 2008. According to this source, that was a penny worse than what Wall Street was bracing itself for.

Continue reading E*Trade loses more money -- why would I want to own this stock?

E*Trade loses more money -- why would I want to own this stock? originally appeared on BloggingStocks on Wed, 29 Apr 2009 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Investors buy earnings rather than flee pay caps (CAT, GM, JEF, MRK, AMTD)

Closing Bell: Investors buy earnings rather than flee pay caps (CAT, GM, JEF, MRK, AMTD) originally appeared on BloggingStocks on Tue, 21 Apr 2009 16:15:00 EST. Please see our terms for use of feeds.

E Trade Financial Corporation (NASDAQ: ETFC), which competes with TD Ameritrade Holding Corporation (NASDAQ: AMTD) and Charles Schwab (NASDAQ: SCHW), is doing splendidly today. As I write this, the stock is up well over 15%. But I would not touch this one with a ten-foot pole, as they say.

According to this article, E*Trade reported a quarterly loss on Tuesday of $0.50 per share. While that was a lot better than the $3.98 per-share loss reported in last year's Q4, it wasn't enough to beat expectations. Wall Street was hoping for a loss of $0.24 per share. E*Trade said in its press release that daily average revenue trades increased 18% and that 97,000 new accounts were captured. While both of those stats are impressive to a certain degree, an investor must keep in mind that E*Trade is a complicated story. The company really screwed itself by exposing its shareholders to so much financial risk; sure, that might be hindsight now, but it nevertheless is true. And with all the loan provisions and all the issues with the company's involvement with applying for the government's TARP initiative, etc., I can tell you that I absolutely would not want to play around with this stock.

Continue reading E*Trade misses in Q4, but stock rises anyway

E*Trade misses in Q4, but stock rises anyway originally appeared on BloggingStocks on Wed, 28 Jan 2009 15:34:00 EST. Please see our terms for use of feeds.

I think it's fair to say that there's much trepidation about the earnings season that picks up steam this week. And for better or worse, numbers from the big financials have begun to roll in. Last week we saw profit sink for JPMorgan Chase (NYSE: JPM) and significant losses from Bank of American Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), and Deutsche Bank (NYSE: DB).

Analysts surveyed by Thomson Reuters expect Bank of New York Mellon Corp. (NYSE: BK) to be among those financials reporting fourth-quarter earnings growth this week. They anticipate that Bank of New York will post a profit of $0.70 per share, compared to $0.67 per share a year ago and $0.72 in the previous quarter. Revenue is expected come to $3.8 billion, about the same as it was a year ago. Bank of New York has fallen short of earnings estimates in two of the past five quarters, by as much as 11.1%. For the full year, analysts are looking for $2.78 per share (+5.8%) on $14.8 billion (+4.2%). The consensus recommendation of analysts is to buy BK, and the long-term EPS growth rate forecast is 10.7%. Shares are 48.7% lower than a year ago. Other financials expected to report quarterly earnings growth this week include SunTrust Banks Inc. (NYSE: STI) and M&T Bank Corp. (NYSE: MTB).

Continue reading The week in preview: Financials, techs lead off earnings crunch

The week in preview: Financials, techs lead off earnings crunch originally appeared on BloggingStocks on Sun, 18 Jan 2009 12:30:00 EST. Please see our terms for use of feeds.