Financial stock Interactive Brokers formed a three-week-tight base, and is nearing a buy point. The company gained 21% this year and is Thursday's IBD 50 Stocks To Watch pick.
Interactive Brokers holds the top spot out of 32 stocks in the Finance-Investment Bank/Brokers industry group. The group is ranked No. 28 out of the 197 IBD industry groups, and has held a top 40 spot for the last three months. The CAN SLIM investing strategy looks to the top 40 industries to find leading growth stocks.
Additionally, this deep-discount broker provides broad market coverage in stocks, options, futures, currencies, bonds, mutual funds and cryptocurrencies.
Interactive Expands Into Taiwan And Adds Crypto
Connecticut-based Interactive serves institutional and individual clients in over 200 countries and territories. It operates through American, European and Asia-Pacific exchanges.
Recently, the global broker announced a partnership with Taiwan-based SinoPac Securities, to be SinoPac's primary international trading firm. The reciprocal arrangement announced in mid-February allows Taiwan clients to trade U.S. stocks, ETFs, and fixed income instruments with access to over 90 stock markets worldwide through Interactive Brokers.
Meanwhile, Interactive recently added bitcoin and ethereum cryptocurrency trading to its Hong Kong professional investor clients.
The online broker is slashing its automated robo-advisor fees on its 22 actively managed portfolios by 50%, capping it at 75 basis points, to entice more investors into the program.
Finance Stock Forms New Base
The financial stock's three-weeks-tight pattern has an 89.07 buy point. The pattern formed after the stock broke out of a cup-with-handle base with buy point of 81.56, according to MarketSmith pattern recognition.
IBKR hit an all-time high on Feb. 14, and is within 2% of the high. The relative strength line is climbing, a positive sign for the financial stock. IBKR found support at its 21-day moving average.
February Sees Fewer Trades But More Clients
The brokerage firm reported February performance numbers Wednesday. Daily Average Revenue Trades (DARTs) dropped 15% from the prior year, but increased 7% over January. IBKR added 2.16 million client accounts, representing 22% growth from a year ago.
IBKR reported better-than-expected Q4 earnings per share and sales in mid-January. Q4 earnings of $1.30 per share marked an increase compared to $1.08 and 84 cents in the prior two quarters.
Quarterly sales strengthened in the last several quarters, with Q4 sales growing 131% and September-ended quarter sales climbing 114%.
Annualized 2022 EPS grew 19.5%. Analysts project a hefty 39% annualized EPS growth rate in 2023, tapering to 3% in 2024.
Mutual funds own 44% of shares, with 560 owning the financial stock in December, up from 465 in September. Rising institutional ownership can be a positive sign for stock performance.
Management owns 6% of shares, demonstrating a vested interest in the stock's performance.
Interactive earned the top spot in Barron's Best Online Brokers 2022.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
