4-Star Stocks Poised to Pop: E*TRADE (ETFC)

4-Star Stocks Poised to Pop: E*TRADE

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, retail broker E*TRADE Financial (Nasdaq: ETFC ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at E*TRADE's business and see what CAPS investors are saying about the stock right now.

E*TRADE facts

Headquarters (Founded)	New York (1982)
Market Cap	$2.36 billion
Industry	Investment brokerage
Trailing-12-Month Revenue	$1.39 billion
Management	Interim Chairman/CEO Steven Freiberg CFO Matthew Audette
Return on Equity (Average, Past 3 Years)	(15.8%)
Competitors	Charles Schwab (NYSE: SCHW ) TD AMERITRADE (Nasdaq: AMTD )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 2,762 members who have rated E*TRADE believe the stock will outperform the S&P 500 going forward. These bulls include dbensou and GingerInOz.

Earlier this week , dbensou tapped E*TRADE as a tempting turnaround opportunity: "They will continue to make money on trades while the bad loans wind down. Time is in their favor."

In fact, E*TRADE currently sports a paltry price-to-cash flow of 4.3. That represents a clear discount to main rivals Charles Schwab (8.2) and TD AMERITRADE (11.3).

CAPS member GingerInOz expands on the outperform argument:

E*Trade has much to offer. Comparing it to "similar" sites, its costs to customers are in the mid to low range. They are not the least expensive because they offer tools a true investor needs to evaluate a company they are considering buying. More and more people are going to turn to online trading.

What do you think about E*TRADE, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track E*TRADE? Add it to your watchlist.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Charles Schwab. Try any of our Foolish newsletter services free for 30 days.

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Comments from our Foolish Readers

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Report this Comment On December 01, 2011, at 9:24 AM, Trob10 wrote:

I would agree that E Trade will come back on the rise as far as their stock value goes, but I believe it will take a rebranding strategy to help get them there. Currently, E Trade's advertisements with their famous baby icon, are about the only thing they have going for them. You ask anybody which company has the "famous baby that's hilarious" and I bet most will remember the baby and maybe 60% will remember which company that's from. The point is this. E Trade continues to get brand recognition by showing their baby on advertisements. What E Trade lacks right now, is showing their actual products in the commercials. Watch one of their mobile commercials (http://www.youtube.com/watch?v=HNSsmlI7mdY) and you'll understand what I mean. There's about a 5 second blurp about what the commercial wants you to try; their mobile app. E Trade's baby does great for recognition and catching the audience's attention, but I think the baby can be a bit distracting. A re-branding effort to show the baby less and the products more is much needed.
In my opinion, I think their commercials send a mixed message. Right now, their commercials seem to tell me, "E Trade is so easy to use, a baby can do it." But, the fact is maybe it is easy to use, but show me!
E trade is only the best option if your truly an active day trader, making say 150+ trades in a quarter. Now, their ads are trying to get unexperienced traders to start out with E Trade. But, in reality, E Trade is not best suitable with new traders because of their $45 brokerage fees per trade, and their $40 or so fee for having a balance less than $10,000.
I think E trade should rebrand to "Let E Trade Grow with you". They should show the baby to grab attention, and then bring in an older figure to show that E trade can help you grow as an investor if you try out their services.
The facts say that E Trade is a site not in favor of young, possibly not active traders, yet their ads are conflicting. E Trade has potential because of their brand recognition, but needs to display features such as their cool mobile app more often, and focus their ads on their target market a lot better.