Interactive Brokers Gains as April Metrics Rise - Analyst Blog

On Friday share price of Interactive Brokers Group, Inc. IBKR rose nearly 1% as the company's Electronic Brokerage segment recorded a year-over-year rise in brokerage metrics for Apr 2014. The segment clears and settles trade globally for both individual and institutional clients.

Total customer Daily Average Revenue Trades (DARTs) were 576,000, up 20% from Apr 2013 but down 1% from 583,000 in Mar 2014. Further, total customer accounts climbed 16% from the prior-year month and 2% from the prior month to 255,600.

Interactive Brokers recorded Cleared Customer DARTs of 524,000, up 19% from Apr 2013 but down 1% from Mar 2014. Further, on an annualized basis, Cleared Average DARTs per customer account of 518,000 increased 2% from the comparable prior-year period but fell 2% from the prior-month level.

Interactive Brokers' total option contracts came in at 23.5 million, up 3% from the year-ago month and almost in line with the prior-month level. Moreover, while future contracts decreased 4% from Apr 2013, it increased 2% from Mar 2014 to 9.2 million.

Interactive Brokers also provided data related to period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended Apr 2014, customer equity was $49.4 billion, rising 36% year over year and 1% from the prior-month figure.

Further, Interactive Brokers recorded customer credit balances of $27.1 billion in the reported month, up 20% from Apr 2013 and 1% from Mar 2014. Additionally, the company's customer margin loan balance of $14.7 billion at the end of Apr 2014 rose 34% from Apr 2013 and 2% from Mar 2014.

Improvement in trading activities has been the major catalyst in driving Interactive Brokers' top-line growth in the trailing few quarters. Trading gains largely depend on the overall performance of the equity market, which has rebounded in the recent past. Nevertheless, we cannot vouch for the stability, given its innate volatile character.

On a positive note, we believe that with further recovery in the overall economic scenario, the recent up tick in the equity market will continue. This in turn will support the trading activities of investment firms like Interactive Brokers.

Currently, Interactive Brokers carries a Zacks Rank #1 (Strong Buy). Other investment brokers worth considering include E*TRADE Financial Corp. ETFC, Investment Technology Group Inc. ITG, and Piper Jaffray Companies PJC. All of these stocks carry the same Zacks Rank as Interactive Brokers.