Interactive's Monthly Metrics Rise - Analyst Blog

Interactive Brokers Group Inc.’s (IBKR) Electronic Brokerage segment witnessed an improvement in its brokerage metrics for Feb 2013. The segment clears and settles trades globally for both individual and institutional clients.

Interactive’s total customer Daily Average Revenue Trades (DARTs) hiked 9% from Feb 2012 and 6% from Jan 2013 to 488,000. Further, total customer accounts climbed 12% from the prior-year month and 1% from the prior month to 214,500.

Interactive recorded Cleared Customer DARTs of 445,000, increasing 9% from Feb 2012 and 7% from Jan 2013. Yet, on an annualized basis, Cleared Average DART per customer account of 524,000 dipped 2% from the comparable month last year, but grew 6% from the previous month.

Additionally, Interactive’s total options contracts fell 4% from the prior-year month and 9% from the prior month to 19,505 in the month under review. However, future contracts totaled 8,140, surging 32% from Feb 2012 and 7% from Jan 2013.

Interactive also reported period-end statistics for customer equity, customer credit balances and customer margin loan balances. For the period ended Feb 2013, customer equity stood at $34.7 billion, augmenting 23% year over year and marginally climbed 1% from the prior month.

Interactive’s Electronic Brokerage segment recorded customer credit balances of $22.4 billion in the month, increasing 19% from Feb 2012 level and 1% from Jan 2013 level. Also, the company’s customer margin loan balances of $11.2 billion at the end of Feb 2013 surged 37% from $8.2 billion at the end of Feb 2012, and inched up 1% from $11.1 billion at the end of Jan 2013.

Overall brokerage metrics improved in the quarter, but lower trading activities and fluctuating interest rates are expected to mar the company’s financials in the near term. In addition, Interactive’s dependence on IBG LLC and its extensive international exposure makes us apprehensive.

Among other investment brokers, Knight Capital Group, Inc. (KCG) is expected to announce its February metrics in the first half of this month.

Currently, Interactive holds a Zacks Rank #5 (Strong Sell). Investment brokers that are performing well include Evercore Partners Inc. (EVR) and Piper Jaffray Companies (PJC). Both these carry a Zacks Rank #1 (Strong Buy).

EVERCORE PARTNR (EVR): Free Stock Analysis Report

INTERACTIVE BRK (IBKR): Free Stock Analysis Report

KNIGHT CAP GP (KCG): Free Stock Analysis Report

PIPER JAFFRAY (PJC): Free Stock Analysis Report

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