Storm The Castle: TD Ameritrade (AMTD)

Trade-Ideas LLC identified TD Ameritrade (AMTD) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

TD Ameritrade

(

AMTD

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified TD Ameritrade as such a stock due to the following factors:

  • AMTD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $108.3 million.
  • AMTD has traded 1.1 million shares today.
  • AMTD is trading at 2.10 times the normal volume for the stock at this time of day.
  • AMTD crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AMTD:

TD Ameritrade Holding Corporation provides securities brokerage services and related technology-based financial services to retail investors, traders, and independent registered investment advisors (RIAs) in the United States. The stock currently has a dividend yield of 1.9%. AMTD has a PE ratio of 23. Currently there are 7 analysts that rate TD Ameritrade a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for TD Ameritrade has been 3.0 million shares per day over the past 30 days. TD Ameritrade has a market cap of $19.0 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.43 and a short float of 3.5% with 2.82 days to cover. Shares are down 3.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates TD Ameritrade as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:

  • AMTD's revenue growth has slightly outpaced the industry average of 4.7%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, TD AMERITRADE HOLDING CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • TD AMERITRADE HOLDING CORP has improved earnings per share by 5.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TD AMERITRADE HOLDING CORP increased its bottom line by earning $1.50 versus $1.42 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $1.50).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 2.4% when compared to the same quarter one year prior, going from $211.00 million to $216.00 million.
  • 48.74% is the gross profit margin for TD AMERITRADE HOLDING CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.99% is above that of the industry average.

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