Charles Schwab (SCHW) Arya Jhaveri Rishab Negi. Background Discount Brokerage Firm. Allows brokerage...

Charles Schwab (SCHW)

Arya Jhaveri

Rishab Negi

Background

• Discount Brokerage Firm.

• Allows brokerage accounts.

• Low commissions around $8.95 dollars a trade.

• Total Assets = 1.4 billion.

• Founded in 1971

• Headquarters in Sacramento, California.

Basic Numbers

• Current Price: $23.40

• P/E Ratio: 30.4

• Beta: 1.43

• Dividend/ Yield: 1.03%(0.06/1.03)

• EPS: 0.70

• 52-Week Low: $12.47

• 52-Week High: $ 23.92

• Market Cap: 30.07B

• Institutional Ownership: 78%

Stock Recommendation

• Buy 10 shares limit at $23.

• Sell within 1-1.5 years.

Charles Schwab Strategy

• Give Excellent 24 hour customer service.

• Offer trading and analysis tool better than most discount brokerage trading tools. (Smart Street Edge)

• No brokers, all electronic transactions.

• Low commissions around $8.95 dollars a trade.

Charles Schwab: 1 Month

Charles Schwab: 3 Month

Charles Schwab: 6 Month

Charles Schwab: 1 Year

Charles Schwab: 2 Year

Income Statement:SCHWPeriod Ending Dec 31, 2012Dec 31, 2011 Dec 31, 2010Total Revenue 4,883,000 4,691,000 4,248,000 Gross Profit 4,883,000 4,691,000 4,248,000

Operating Income or Loss 1,450,000 1,392,000 779,000 Earnings Before Interest And Taxes 1,600,000 1,567,000 978,000

Net Income 928,000 864,000 454,000

Competition

• ETrade: While ETrade is a solid investing platform, they are in the dump revenue-wise. Over 110 million dollars in revenue lost this year.

• TD Ameritrade- Cash Flow changed by (-117 million) this year. In addition, has only half the operating income of Charles Schwab.

Commission: $9.99 per trade

Commission: $9.99 per trade

Charles Schwab Vs Competitors 1 Year(Etrade, Scottrade,

TDAmeritrade)(Rishab Graph)

ETFC

SCHW

SROI

AMTD

Why Buy Charles Schwab

• Charles Schwab has one of the best trading platforms by far according to Barrons.

• Charles Schwab has a low PEG ratio of around 1.68, suggesting moderate undervaluing.

• Analysts from Thomson Reuters say that Charles Schwab is a strong hold/moderate buy.

Why Buy

• Charles Schwab has Excellent customer service, making it reliable.

• Charles Schwab has huge revenues compared to its competitors, and owns over 52% of the market share for Custodian Accounts.

Why Buy

• Charles Schwab has overtaken many of its competitors in new Customer revenue, and has $37 billion in new customer assets, compared to Merril Lynch, with 17 billion in new customer revenue.

• Charles Schwab has overtaken everyone in total client assets with the exception of Merril Lynch, with has .3 trillion more.

Overall

• With strong customer support, overall growth trends, a huge market share, and strong earnings growth, Charles Schwab is an excellent option to invest in.