The Zacks Analyst Blog Highlights:Charles Schwab, TD Ameritrade Holding,
E*TRADE Financial, Evercore Partners and Medtronic
CHICAGO, Feb. 19, 2013
CHICAGO, Feb. 19, 2013 /PRNewswire/ -- 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 include The Charles Schwab Corporation
(NYSE:SCHW), TD Ameritrade Holding Corporation (NYSE:AMTD), E*TRADE Financial
Corporation (Nasdaq:ETFC), Evercore Partners Inc. (NYSE:EVR) and Medtronic
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Here are highlights from Friday's Analyst Blog:
Schwab's January DARTs Climb
In its monthly market activity report for Jan 2013, The Charles Schwab
Corporation (NYSE:SCHW) reported Daily Average Revenue Trades (DARTs) of
504,700. This was up 5% from 480,200 in the prior month and 8% from 468,400 in
the year-ago month.
Schwab's net new assets bought by the new and existing clients totaled $12.1
billion, plunging 49% from Dec 2012, but surging 70% from Jan 2012. Also, this
included a $2.2 billion inflow related to a mutual fund clearing services
client. Further, total client assets stood at $2.01 trillion, improving 3%
from Dec 2012 and 16% from Jan 2012.
Schwab opened 87,000 new brokerage accounts in the reported month, 10% less
than Dec 2012 level, but it climbed 18% from Jan 2012. The company's active
brokerage accounts totaled 8.82 million, almost flat compared with the
prior-month and up 3% year over year.
Moreover, clients' banking accounts inched up 1% over the prior-month and
elevated 11% year over year to 874,000. Moreover, the number of corporate
retirement plan participants was 1,554 million, declining 1% from Dec 2012 but
improving 3% from Jan 2012.
Peer Performances Earlier this week, TD Ameritrade Holding Corporation (NYSE:
AMTD) reported 17% monthly and 3% yearly increases in average U.S. trades in
its Activity Report for the month of Jan 2013. For the reported month, DARTs
reached 387,000, up from 331,000 recorded in the prior month. The rise mainly
resulted from the improvement in the equity markets.
Similarly, E*TRADE Financial Corporation (Nasdaq:ETFC) also reported a rise in
its DARTs for Jan 2013. The company's DARTs stood at 153,580, improving 18%
from Dec 2012 and 6% from Jan 2012, on the back of increased investments by
Amid the challenging economy, rising DARTs and new brokerage accounts will be
beneficial for Schwab. Yet, lower trading activities and fluctuating interest
rates are expected to continuously impact the company's financials in the near
Further, we remain concerned about the company's low capital intensity
relative to its peers. However, its focus on low-cost capital structure will
help it sustain better results in the upcoming quarters.
Schwab currently retains a Zacks Rank #3 (Hold). However, one of its peers,
Evercore Partners Inc. (NYSE:EVR) is more favorably placed and carries a Zacks
Rank #1 (Strong Buy).
Earnings Preview: Medtronic
We expect leading medical devices company – Medtronic (NYSE:MDT) to beat
expectations when it reports third-quarter 2013 results on Feb 19.
Why a Likely Positive Surprise?
Our proven model shows that Medtronic is likely to beat earnings because it
has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP (Read: Zacks Earnings ESP: A Better Method),
which represents the difference between the Most Accurate Estimate and the
Zacks Consensus Estimate, is at +2.20%. This is very meaningful and a leading
indicator of a likely positive earnings surprise for shares.
Zacks #2 Rank (Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings. The sell rated stocks (#4 and
#5) should never be considered going into an earnings announcement.
The combination of Medtronic's Zacks Rank # 2 (Buy) and ESP of +2.20% makes us
very confident in looking for a positive earnings beat on Feb 19.
What is Driving the Better Than Expected Earnings?
Medtronic is enjoying market share gain on the back of the Resolute Integrity
DES for the treatment of coronary artery disease. Other recently launched
products are also contributing to overall growth. The company also reiterated
its aim of returning 50% of free cash flow to shareholders and is targeting
suitable acquisitions to augment growth. Meanwhile, Medtronic has increased
its focus on the emerging markets and is targeting higher revenues from this
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