It may be a while before we see commercials about day traders buying islands, but there is little doubt that the retail investor is back. Yesterday, Ameritrade
For the quarter, the company generated net income of $71.9 million or $0.17 a share, up from $22 million or $0.05 a share last year. Revenues surged 25% to $226.4 million.
With the clients hungry for action, pumping in $11.5 billion in cash for the quarter, it should be no surprise that Ameritrade upped its guidance. For fiscal year 2004, the company expects to earn between $0.49 and $0.79 a share, compared to previous guidance of $0.37 to $0.59.
As much as a rallying market has helped, Ameritrade has also had a laser focus on reducing its cost structure, while at the same time, adding features and services. The firm also made several gutsy acquisitions, including Bidwell & Co. and Datek.
Last quarter, Ameritrade averaged 175,000 trades a day. And it is ramping significantly. Thus far in 2004, the daily average is about 250,000.
With a rising stock price, Ameritrade has currency to make deals. One speculation is a purchase of TD Waterhouse, part of Toronto Dominion Bank
In the world of online investing, Ameritrade is a pure play, which makes the stock very enticing for momentum investors. And to be sure, if the bull market continues apace, there is likely a bit of earnings-per-share momentum ahead.
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Tom Taulli is the author of six books on investing, including The Complete M&A Handbook (Random House). You can reach him firstname.lastname@example.org.