The stock I am recommending below qualifies as cheap and the business is mired at the nadir of a cycle. The crowd on this stock is nowhere in sight because many of the big brokers don't even cover the company.

But if you carefully consider the strategic position of this company, as well as the long-term outlook, perhaps you will see what I think Wall Street is missing.

Ameritrade

I analyzed Ameritrade (AMTD:Nasdaq - news - boards) in detail when I considered it for my Top 10 Turnaround column at the end of December. I opted for E*Trade (ET:NYSE - news - boards) (up 30%) instead of Ameritrade (up 2%) because of E*Trade's strong banking franchise, a clear beneficiary against a poor market for equities. While I continue to like E*Trade, at today's prices and at this point in the cycle Ameritrade may be a better bet.

Ameritrade Is a Good Bet At today's prices, it's a better choice than E*Trade

Ameritrade is, hands down, the best publicly traded online brokerage in terms of cost efficiency. After pouring resources into improving the efficiency of its trading platform, Ameritrade's cost per trade is now one-half of its next-closest competitor, and it generates operating margins in excess of 23%. The efficiency of the Ameritrade operation is the reason account holders enjoy a commission rate structure that should make Charles Schwab blush:

Cost Efficient Ameritrade's commission rate structure makes other brokers green with envy
Shares	AMTD	E*Trade	Schwab	CSFBdirect
1,000	$8.00	$14.95	$29.95	$20
10,000	$8.00	$114.95	$299.95	$200

Ameritrade is not an easy company to analyze. It is too early in the online investment game to accurately identify the share of the market it is going to win. And you can't use a price-to-earnings ratio with this company, as it will continue to spend its ample operating cash flow on marketing.

Of course, Ameritrade could drop its marketing budget and earnings would soar. But it's not in the interest of shareholders. Not when it can acquire new accounts in one year that are worth, for example, $200 million in net present value, compared to the marketing expenditure of $100 million to acquire those accounts.

While all of my recommendations are for investors (one- to three-year hold), not traders, this one may be appropriate for very long-term investors. Even if this $7.50 stock jumped to my wide target price range of $10 to $20, I would recommend holding it for the long term.