This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

E*Trade, TD Ameritrade Talk Has Skeptic

Stocks in this article: ETFC AMTD

Updated to include analyst interview comments, closing share price.

NEW YORK ( TheStreet) -- The talk about a hookup between E*Trade Financial (ETFC) and TD Ameritrade Holdings (AMTD) heated up again earlier this month, but Raymond James isn't buying it.

"We do not believe that recent chatter regarding the potential purchase of E*Trade by TD Ameritrade has any merit," the firm told clients in a note Tuesday. "In our opinion, E*Trade needs several more quarters to work through its loan loss provisions before another online brokerage firm could reasonably be anticipated to acquire it."

The note was more of a general call on the brokerage and exchange sectors, lowering earnings estimates on both groups to reflect weaker stock trading volumes of late. In addition to E*Trade and TD Ameritrade, the firm cut its views for the fourth quarter on Charles Schwab (SCHW), Investment Technology Group (ITG), Knight Capital Group (NITE), Nasdaq OMX Group (NDAQ), NYSE Euronext (NYX), optionsXpress Holdings (OXPS), Penson Worldwide (PNSN), and TradeStation Group (TRAD).

Raymond James is still relatively bullish on the online brokers for the long-term, however, calling an increase in interest rates -- whenever it occurs -- "a very powerful catalyst for future earnings growth" and citing strong cash positions and the prospect of share buybacks as other positives.

But the round of speculation prompted last week by pro-M&A comments from TD Ameritrade CEO Fred Tomczyck at a Reuters conference roused the firm to weigh in. Beyond the contention that the overhang from E*Trade's ongoing wind-down of its home loan portfolio was significant enough to stave off any suitors for months, Raymond James also took issue with valuation assumptions that have been floated for E*Trade.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs