Hungarian-born founder Thomas Peterffy came to the U.S. in 1965 and started his career as a computer programmer. He had the visionary idea of applying his technical skills to Wall Street, and became a member of the American Stock Exchange in 1977.
Interactive Brokers' platform now processes trades for stocks, bonds, futures, and foreign exchanges. It promotes both increased liquidity and rock-bottom fees for institutional investors, financial advisors and brokers. Over the past year, Interactive Brokers' revenues surged 58% to $1.7 billion. Because of its low cost structure, the company posted a stunning net profit of $734 million -- about $1.45 million per employee.
The company faces serious competition from players like Goldman Sachs
The company's valuation equals approximately 16 times EBITDA. While this may seem frothy, it's not unexpected in the heady securities-exchange space. Look at Deutsche Boerse's recent $2.8 billion bid for International Securities Exchange Holdings
On a relative basis, Interactive Brokers does look cheap. Individual investors should remember, though, that these kinds of stocks can be quite volatile, requiring a tough stomach for anyone who wants to hop onboard.
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