The Zacks Analyst Blog Highlights: TD Ameritrade Holding, Evercore Partners, Greenhill & Co., Piper Jaffray and Ann
Zacks Equity Research
For Immediate Release
Chicago, IL – February 13, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog includeTD Ameritrade Holding Corporation (AMTD), Evercore Partners Inc. (EVR), Greenhill & Co., Inc. (GHL), Piper Jaffray Companies (PJC) and Ann, Inc. (ANN).
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Here are highlights from Tuesday’s Analyst Blog:
TD Ameritrade January DARTs Rise
TD Ameritrade Holding Corporation (AMTD) – an online brokerage firm – reported a 17% increase in average U.S. trades in its Activity Report for the month of Jan 2013. On a year-over-year basis, the U.S. trades were up 3%.
For the reported month, Daily Average Revenue Trades (DARTs) were 387,000 compared with 331,000 recorded in the prior month. The rise in DARTs primarily resulted from the improvement in the equity markets.
Broker performance is generally measured through DARTs that represent the number of trades, from which brokers can commissions or fees.
TD Ameritrade reported $499.3 billion in total client assets in January, up 17% year over year and 4% from the prior month. Moreover, average spread-based balances augmented 12% year over year to $83.4 billion. Further, these balances scaled up 3% from Dec 2012.
At the end of January, average fee-based balances stood at $107.8 billion, up 32% year over year and 5% from the last month.
Quarterly Performance
As of Dec 31, 2012, DARTs decreased 9% year over year to 334,035. Net new client assets reported were $15.6 billion, up 53% from $10.2 billion a year ago.
For the quarter, TD Ameritrade reported $480.8 billion in total client assets, up 18% year over year. Moreover, average spread-based balance was $79.3 billion, up 9% from $72.6 billion in the prior-year quarter. Average fee-based balances surged 28% year over year to $100 billion.
Our Viewpoint
The competitive position of brokerage business in the market depends on trading customers, with emphasis on active traders. As the long-term investing customer group is less developed compared to trading customers, there is an opportunity for future growth in case the long-term customer base expands.
Development of innovative ways for online trading and long-term investing products and services, delivery of advanced customer service, creative and cost-effective marketing and sales, as well as expense discipline can be considered as the key factors behind TD Ameritrade’s strategy of boosting its trading and investing business.
Amidst a volatile operating environment, TD Ameritrade witnessed a decline in organic client asset. The company also reported waning trading volumes, and therefore a significant turnaround remains elusive. Further, a low interest rate environment is a matter of concern.
TD Ameritrade currently retains a Zacks Rank #2 (Buy). Other brokerage firms that are also performing well include Evercore Partners Inc. (EVR), Greenhill & Co., Inc. (GHL) and Piper Jaffray Companies (PJC). All these stocks carry a Zacks Rank #1 (Strong Buy).
Ann, Inc. 4Q Sales to Miss Estimate
Women’s apparel retailer Ann, Inc.. (ANN) recently came up with lower-than-expected preliminary sales results for the fourth quarter of fiscal 2012. Net sales for the quarter are anticipated to be $608 million, which is below the company’s earlier forecast of $625 million and the Zacks Consensus Estimate of $612 million.
The trimmed sales projection now portrays a decline of 1% in comparable-store sales (comps), significantly down from its previously forecasted range of mid-single-digit growth. Weak sales at LOFT stores during the holiday season and Superstorm Sandy in the Northeast region negatively impacted the company’s sales. The company stated that comps at the company’s Ann Taylor brand stores inched up 1% while it declined 2% at LOFT stores.
Gross margin for the quarter is expected to expand 10 basis points (bps) on a year-over-year basis to 49.0% but will remain below the company’s earlier expectation of 51.0% primarily due to increased promotional activities during December and January.
Selling, general and administrative (SG&A) expenses for the quarter is anticipated to be $297 million, lower than the company’s previous forecast of $300 million.
However, despite ANN’s below-than-expected fourth-quarter preliminary sales results, the company is anticipating to post record earnings per share results for fiscal 2012 on the back of strong sales and improved operating margin.
Net sales for fiscal 2012 are expected to increase by 7.4% to $2.376 billion from $2.212 billion in fiscal 2011. However, net sales will remain below the company’s guidance of $2.395 billion as well as Zacks Consensus Estimate of $2.377 billion.
Gross margin for the fiscal is anticipated to come in at 54.8%, slightly below the company’s earlier expectation of 55.0%. SG&A expenses are projected to be $1.136 billion compared with the company’s prior guidance of $1.140 billion. Capital expenditure are expected to touch $155 million, lower than ANN’s forecast of $160 million.
During the fiscal, ANN repurchased 4.9 million shares for a total sum of $135 million. Of the total shares repurchased during the fiscal, 1.8 million shares were bought back during the fourth quarter at a cost of $60 million.
ANN is expected to announce its fourth-quarter and fiscal 2012 results before the markets open on Friday, Mar 8, 2013. Currently, the company holds a Zacks Rank #4 (Sell).
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