Why E*Trade Financial Corporation Is Ready to Bounce Back

Does this analyst make a good case or is it just more noise from Wall Street?

Apr 11, 2014 at 12:05PM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of E*Trade Financial Corporation (NASDAQ:ETFC) gained 1% on Friday after Barclays upgraded the discount brokerage from underweight to overweight.

So what: Along with the bullish call, analyst Sherri Scribner planted a price target of $40 on the stock, representing about 22% worth of upside to yesterday's close. So while momentum traders might be turned off by E*Trade's sharp pullback in recent weeks, Scribner's call could reflect a growing sense on Wall Street that the concerns surrounding its prospects are becoming a bit overblown.

Now what: According to Barclays, E*Trade 's risk/reward trade-off is rather attractive at this point. "For ETFC, relative to last year, we are incrementally positive on a story that contains far less operational risk, has displayed sustainably strong performance in its trading business, and has significantly improved its capital profile (providing it opportunity to further enhance earnings down the line)," said Hill. When you couple E*Trade's still-hefty debt load with its steep-ish forward P/E of 18, however, I'd wait for a much wider margin of safety before buying into that bullishness.

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Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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