I don't have time to give specific reasons for the stocks I'm about to buy today. I wish to be full invested for the end of the year rally that will probably take the S&P500 and the Nasdaq to new highs.
I believe the chart below clearly says I must buy TRAD at today's open. More specific reasons will be added to this recommendation at the daily updates to come.
QuoteI don't have time to give specific reasons for the stocks I'm about to buy today
LOL sometimes silence is golden, just let the stock do the talking for you ;)
TRAD has sort of a rounding bottom pattern (not technically correct according to the rule book but the sentiment is the same a long term bearish trend moving to bullish) is above some old historical resistance (Red line) and if continuation is in play should shape up to re-visit old highs (Blue line) and breakout. This pattern is a weekly chart long term so the breakout shapes up over time (i.e. not)t a few days. The sector is strong right now as well which makes TRAD a great play in prospect.
Thanks for that beautiful chart Aussie :)
Since you already made a nice technical analysis, I'll talk a bit about the fundamentals of Tradestation.
In the first place, I will, in the near future, open an account with them, because I've seen their demos and the service looks fantastic to me (it could eliminate my need to watch the market near the closing bell).
The market cap is just about $500M, while E*Trade's is $7.07B (and E*Trade is undervalued) and Schwab's is about $20B !
Let me give you some highlights from their latest quarterly earnings report:
1) «PLANTATION, Fla., Oct 26, 2005 /PRNewswire-FirstCall via COMTEX/ -- TradeStation Group, Inc. (TRAD) today reported record quarterly net revenues of $24.1 million, record quarterly income before income taxes of $8.9 million, record daily average revenue trades (DARTs) of over 41,000, and record total brokerage accounts of over 22,000.»
2) «TradeStation Group's 2005 third quarter net income of $5.3 million, or 12 cents per share (diluted), was a 188% increase over 2004 third quarter net income of $1.8 million, or 4 cents per share (diluted).»
If they continue to earn 12 cents a share, without any growth (I think they will grow faster and faster), they would make 48 cents in a year. The stock price is $11.65 now, so the P/E Ratio is 24. Earnings growth is 188% and the multiple is 24. This means that, by this simple metric (comparison between the growth rate and the P/E Ratio), the stock is undervalued.
3) «The company's 2005 third quarter operating margin of 35% was a 110% increase from its 2004 third quarter operating margin of 16%, and an 11% sequential increase from its 2005 second quarter operating margin of 31%.
The company's 2005 third quarter net revenues of $24.1 million were a 40% increase over 2004 third quarter net revenues of $17.2 million. »
4) «While the average TradeStation account traded 480 times per year, or 40 times per month, the average Ameritrade and E-Trade account traded about 10 times per year, or less than one time per month. Also, TradeStation's average assets per equities account of $85,000 was substantially higher than the average assets per account of Ameritrade and E-Trade.»
Their costumers are much better than those of the competition.
I have a friend who owns a small brokerage house here in Portugal. He says one good costumer may be worth 100 or even 1,000 "bad costumers". Just one client of him, who was an active day trader, accounted for more than 50% of his revenue :o
For the entire year, TRAD expects this: «The company also announced that its Earnings Per Share (Diluted) Business Outlook for the 2005 year is now an estimated range of 43 to 44 cents.»
So, for 2006 probably earnings are going to be higher and the stock is way undervalued at this point.
On their profile it says this:
«TradeStation Group, Inc. (TRAD), through its operating subsidiary, TradeStation Securities, Inc., offers the TradeStation platform to institutional, professional and serious, active individual traders. TradeStation is an electronic trading platform that offers state-of-the-art direct-access order execution and enables clients to design, test, monitor and automate their own custom trading strategies. In February 2005, TradeStation was named Best Stock Brokerage and Best Futures Brokerage and, for the third year in a row, Best Direct-Access Stock Broker, Best Direct-Access Futures Broker, Best Professional Platform and Best Institutional Platform, in Technical Analysis of Stocks and Commodities magazine. The trading platform currently offers streaming real-time Equities, Options, Futures and Forex market data.
TradeStation Securities, Inc. (Member NASD, NYSE, SIPC, NSCC, DTC, OCC & NFA) is a licensed securities broker-dealer and a registered futures commission merchant, and also a member of the American Stock Exchange, Archipelago Exchange, Boston Options Exchange, Chicago Board Options Exchange, Eurex US, International Securities Exchange and Philadelphia Stock Exchange. The company's other operating subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services, and hosts the company's annual users conference.»
One day, possibly, many of us will be professional traders, and we'll want an account with Tradestation, I can guarantee you that. It has the lowest commissions and the best service.
Just buy and hold, I think this may be a multi bagger if one has the time.
I think I've made my fundamental point on TRAD at the last update.
Looking at the all history chart we see that TRAD may face resistance around current levels. So maybe there's a pullback to be expected.
But I can't sell this stock, not with these fundamentals and not with the current general market condition. I might lose my position.
So I'll continue holding, expecting much higher prices over the weeks to come.
Those 3 consecutive powerful white marubozus, a pattern called «3 white soldiers» is very bullish indeed. But it would be amazing for the stock to continue moving higher after such huge gains over the short term. People take profits too.
But I won't, not with this technical and fundamental background. Also, not with the current kind of basic conditions on the general market.
TRAD will go higher, not a doubt in my mind.
I like the price action on TRAD, reminds me of NWRE before it took off to new highs, TRAD broke out of its 2 year base on great business metrics report on Nov 2, and if history is any indication I am looking for good numbers come early December to propel the stock higher. Great fundamentals and a growth story that has been under the radar for a while. And yes those powerful white candles will not go for not. Below is a link to the business metrics history and it sure looks great ;)
http://www.tradestation.com/aboutus/businessmetrics.shtm
Thanks for your analysis fantazia, I fully agree with it, let me applaud :)
It sure reminds NWRE, oh my, I wish I held that stock a little longer ... but I'm learning everyday, and now with the Fast Portfolio the 3 Stocks on Fire Portfolio will probably be able to hold stocks for some more time.
Volume on TRAD is coming down as the stock digests that 3 white soldiers pattern, but soon it will shoot again to new highs. Fundamentals and technicals are working together here, and nobody should stand in the way.
TRAD is just consolidating its recent gains before it makes another powerful white marubozu to new highs.
I said this:
Quote from: David Randolph on November 10, 2005, 09:27:43 AM
TRAD is just consolidating its recent gains before it makes another powerful white marubozu to new highs.
And the stock listened, as you can see on the chart below.
Actually, I think TRAD is the best pick on the 3 Stocks on Fire Portfolio, and I think its share price will at least double over the next 6 months. If I were to play at the 3 Stocks on Fire $1,000 contest this would have been my pick. Well, maybe on the next challenge, next month.
Looking now at the long term chart, I see TRAD is hitting long term resistance now. I believe the stock will cross that resistance level to new all time highs above $16.
QuoteLooking now at the long term chart, I see TRAD is hitting long term resistance now.
The stock crossed the long term resistance like there wasn't any. Now we have the 2003 high at $13.75 and the all time high at $16. I truly believe both these resistance levels will soon be below TRAD, and the stock will see new all time highs, maybe still in 2005.
Fundamentals are just too attractive as you can read below on this thread.
Just a retest to the old long term resistance, now support. Look for the continuation of the strong upward trend.
Does the downgrade that just occured change your view on this David? I am thinking of selling to protect the small profit i have.
Just got stopped out, ah well, made $23 on the trade :)
To me, nothing has changed between yesterday and today. This guy probably just wants cheaper shares himself. I will see where we are at the end of the day, but right now it just appears people are panic selling to me.
Picked up some more shares at 11.50 :o, could not pass it up, its always best to take adventage when others panic for no reason. I wish I had that kind of power, to yell downgrade and stock drops 10% heheh. Market is its on beast and all you can do is follow what you already know. Earnings and monthly metric #'s are higher substantialy yoy, and with their new lower rates to take effect on December 1 ( as per their latest quarterly release) , this should accelerate growth even more. Lastly not to forget this hole sector that TRAD is in has been hot, and TRAD has traded to strong lately to all of the sudden dive into the abyss for no fundamental reason.
Just my 2cents :)
Good Luck
Picked up more shares at 11.30 so avg price is 11.50 or so; Is this over.
I also dumped my CNXT as it traded below 2.12; RDCM is trading below support of 2.82 but I am holding on; also held BRVO and bought more HQSM at 0.47 (also bought some yesterday at 0.56 - not to many though); holding HOM, SVA and HOM too!
Got hammerred on VPHM shares I bought between 18 and 19 - today was bad across the Board; the only stock I made serious money on was ELN, but gave back most of gains by end of day.
Hope tomorrow is not like today
Defenderyou
Bought some BTUI at 15.05 and 15.10 - could bot resist
Feeling sort of alone out here - doesn't anyone else own this stock??
Thanks
Defender, I'll keep you company here for a moment. :) I never bought into TRAD since I didn't have the cash to put into it. It looked great but that was a big selloff today on more than 3x average volume. If the Fed decides to stop raising interest rates, as some expect, then the financial stocks (and probably TRAD type stocks) should do well. I missed the big selloff that happened in many stocks this morning but was able to get back to my computer early enough to buy back into BRVO (sold before earnings) and to sweat a little over HQSM (should have sold before earnings). I also sold CNXT today when it was set to close below my support at 2.17. I'm watching several stocks bouncing (or have bounced) off trendlines including BCON, WPTE (bottom feeding), and MEMY and will see if GZFX can maintain it's rising wedge breakout. Was looking at HOM right before it's last spike. :'(
Will be watching TRAD tomorrow though. Have a good evening!
Keefe Bruyette who downgraded this stock is also one of the most active Market Maker of the stock for the last two months. Cannot seem to understand the reason why they downgraded the stock - maybe its the discounts that Trad is going to initiate from December. Also, the founders have also applied to initiate a stock selling plan of about 3.5 million shares (to be disposed till 2007) - this represent about 8-9% of the paid up.
Technically, this stock broke through long term resistance with ease - however, it also broke through several key technical supports easily as well and with high volume.
Would want to see what it does aroung the 20MA before committing some money into this stock. It is also worth noting that one character of this stock is that it is able to sustain enormous rally (take 2003 rally from $1 to $14 and 1999 rally from $1 to $16)
SMir and Bason - thanks for the input - did not realise how impt K-B was to the stock; that is not encouraging; however, I will hold but I need a game plan to get out if things get too rough - havent come up with that game plan quite yet
Thanks
D
QuoteKeefe Bruyette who downgraded this stock is also one of the most active Market Maker of the stock for the last two months. Cannot seem to understand the reason why they downgraded the stock - maybe its the discounts that Trad is going to initiate from December. Also, the founders have also applied to initiate a stock selling plan of about 3.5 million shares (to be disposed till 2007) - this represent about 8-9% of the paid up.
Maybe it is because they missed the run up and wanted to get in at discount prices.
We'll see, but I feel even more confident after this downgrade than I was before. The stock may go down a bit more, with the public selling, but a couple of weeks from now I see TRAD at new highs above $13.22.
I also don't have an exit plan with a loss at this point, but on the next update I'll provide one, since I believe the market always knows better.
It already broke its trend line and is following the market down. I'm down about 10% in a week, I'm out - and I will do better homework in the future.
In Yahoo finance it states that TRAD has no debt and $450M in cash. Is this accurate?because that would be equal to about $10 per share in cash and if they do have that much cash, they should be buying back their own stock.
Quote from: snowcat on November 16, 2005, 10:03:18 AM
It already broke its trend line and is following the market down. I'm down about 10% in a week, I'm out - and I will do better homework in the future.
Yes, this pullback was hard, as all pullbacks in bull markets are, I wish you better luck for the next week snowcat :)
Quote from: eggman11 on November 16, 2005, 04:13:49 PM
In Yahoo finance it states that TRAD has no debt and $450M in cash. Is this accurate?because that would be equal to about $10 per share in cash and if they do have that much cash, they should be buying back their own stock.
I don't have time to check that out now, but I will have plenty of time in the future because I want TRAD to be a long term holding of the 3 Stocks on Fire Portfolio.
Trading Plan for TRAD: Hold it for as long as it closes above the ascending trendline on the chart below, which for today stands at $9.63.
We've had downgrades, some insider selling, volume kept high and the stock came back !
Some people just don't know the value of what they got, I believe.
Quote from: eggman11 on November 16, 2005, 04:13:49 PM
In Yahoo finance it states that TRAD has no debt and $450M in cash. Is this accurate?because that would be equal to about $10 per share in cash and if they do have that much cash, they should be buying back their own stock.
Yes, the company has no debt (from last 10-Q): «As of September 30, 2005, we have no long-term debt obligations or capital lease obligations.», but those $450M in cash don't belong to the company, they belong to to the company's clients, the traders:
«As of September 30, 2005, we had cash and cash equivalents of approximately $47.8 million, of which $1.6 million was restricted» and «As of September 30, 2005, TradeStation Securities had: $409.8 million of cash segregated in compliance with federal regulations, in special reserve bank accounts
for the exclusive benefit of customers under Rule 15c3-3 of the Securities Exchange Act of 1934 and other regulations»
Anyway, after yesterday's action I'm not providing a trading plan anymore, I'll just analyze it everyday, I want TRAD to be a long term holding of the 3 Stocks on Fire Portfolio.
I honestly believe TRAD is undervalued at this point. There's some insider selling and people are a bit worried about it, but I'm not. Insiders have a meaningful stake in the company and they sold just a bit of it (specially one of them, that William Cruz, the Co-Chairman and Co-CEO of the company), maybe for personal reasons.
I will continue holding TRAD for the long term.
William Cruz, the Co-Chairman and Co-CEO of Tradestation Securities, continues to sell, but fewer and fewer shares. I take the conclusion that the insider selling is almost ending, and it was just a small percentage of the insider's holdings.
The stock is coming back strongly as expected, and now I expect TRAD to make new highs above $13.22 soon.
The market will see the value behind this brokerage firm, which is one of the best, if not the best in world for short term traders in my opinion. 1 regular Tradestation client is worth 100 times more or even more than 1 e*Trade client. ET has a market cap of $7.32B (and it is undervalued), while TRAD has a market cap of just $557M.
I will continue holding TRAD for the long term.
Nothing has changed, I'll continue holding TRAD for the long term.
Technically TRAD has an ascending trendline, today at $11.51 and a descending trendline, today standing at $12.81. This is a symmetrical triangle, many times a continuation pattern. In the end the previous trend, which is up, usually resumes.
I will continue holding TRAD for the long term.
Nothing new on TRAD, support is at $11.73, resistance at $12.74. I'll continue holding TRAD for the long term.
William Cruz (Co-Chairman and Co-CEO of the company) is selling every trading day, maybe he wants to buy a new home or something like that.
TRAD is still consolidating the recent bull run, inside a symmetrical triangle pattern. I think that when the breakout occurs, it will be on the upside.
TRAD is a long term holding of the 3 Stocks on Fire Portfolio.
TRAD stands at an important support zone at this point. We have the ascending trendline and an horizontal support at $11.57, which was touched yesterday.
Technically the stock should rebound nicely today, we'll see. I will continue holding for the long term, whatever happens today.
Heavy insider sellings the whole month of November. More than 5 million total.
The stock met with heavy resistance in this price, which can be seen from its 8-year chart
Insider selling is over. According to their filing. The Co-CEO's stated that they would only sell 450,000 shares each (900,000 Tota) over any 3-month period. The have reached the 900,000 limit (they still own 19,000,000 shares between them 48% of the company) and we not sell anymore until at least Mid-February. With the new Metrics for Nov. coming out soon, December could be huge month for TRAD.
Quote from: eggman11 on November 30, 2005, 09:31:49 AM
Insider selling is over. According to their filing. The Co-CEO's stated that they would only sell 450,000 shares each (900,000 Tota) over any 3-month period. The have reached the 900,000 limit (they still own 19,000,000 shares between them 48% of the company) and we not sell anymore until at least Mid-February. With the new Metrics for Nov. coming out soon, December could be huge month for TRAD.
In additionto CO-CEO, I saw big sellins from other parties. I am wondering if this is the end of all the sellings?
Fo me, I may do some short term trade because the down risk is small for the moment.
Quote from: eggman11 on November 30, 2005, 09:31:49 AM
Insider selling is over. According to their filing. The Co-CEO's stated that they would only sell 450,000 shares each (900,000 Tota) over any 3-month period. The have reached the 900,000 limit (they still own 19,000,000 shares between them 48% of the company) and we not sell anymore until at least Mid-February. With the new Metrics for Nov. coming out soon, December could be huge month for TRAD.
Thanks for the information eggman11, let me applaud you :D And there was no SEC filing today from William Cruz or any other.
Probably it was insider selling (mostly non-insiders selling because of insider selling) that took the stock down from $13 to below $12. But it held its ascending trendline, probably the uptrend will resume now and TRAD will break the symmetrical triangle pattern on the upside.
I'll continue holding TRAD for the long term.
Would you recommend buying this at its current level (13)?
Thanks :)
Spectacular breakout of the symmetrical triangle pattern from TRAD yesterday :D The technical target of this breakout is $15.35.
Quote from: ASR831 on December 02, 2005, 01:44:41 AM
Would you recommend buying this at its current level (13)?
Thanks :)
Absolutely ! TRAD is the best stock currently on the 3 Stocks on Fire Portfolio.
I'll continue holding TRAD for the long term.
TRAD opened with a gap up on Friday, then it came down to exactly close the gap at $13.01, and climb back up again to a close near the open, up 2.23%.
The important thing is that the stock closed at a new 2005 high, above the previous high which was $13.22. Now the stock faces a resistance at $13.75, which was the 2003 high, but I have no doubts that will go too ...
I'll continue holding TRAD for the long term.
TRAD released its November business metrics: TradeStation Group Reports Monthly Business Metrics (http://www.marketwatch.com/tools/quotes/newsarticle.asp?dist=¶m=archive&siteid=mktw&guid=%7B356E7E1C%2DA7B3%2D4B76%2D949C%2DA23C875F5A88%7D)
In the 3rd quarter Daily average revenue trades (DARTs) were 41,206, and in November we got 49,827, that is a 20.92% sequential growth.
From a year ago level, growth was 37%, compared to 33% for the 3rd quarter.
The conclusion is that TRAD's growth, which was already high, is accelerating.
DART's for e*Trade are about 125,000, almost with no growth. If these trends persist, one day DART's for TRAD will be higher than for e*Trade.
Now I just have to say that ET has a market cap of $7.55B and TRAD of $579.96M, that is 13 times less, and you'll pretty much see that TRAD is way undervalued.
I'll continue holding TRAD for the long term.
TRAD rose 2.4% yesterday, and the Nasdaq fell 0.39%. That's short term relative strength. Given TRAD's fundamentals I can only see higher prices for the stock.
Yesterday's behaviour on TRAD was a bit odd, going down 7% at one point. Then it came back a bit to close down about 4% for the session.
Remember $11.57 acting as support? Now it's $12.70 that's working. I'm starting to wonder if TRAD will be able to rise in a down market in the future. If history repeats itself it won't, because traders and investors will care more about basic conditions than company specifics.
But since I believe there's one more leg up in this market I'm not concerned for now. In the meantime I'll make more fundamental and historic reviews to know if I'll hold TRAD when I'm bearish the general market, or if I'll just take profits and wait to re-enter at lower prices.
In 2002 TRAD had net profits of $1M. In 2003 they were $11M. In 2004, $14M and in 2005 I expect net profits of at least $18M.
I see this trend in profit growth to continue for TRAD, in bull and bear markets, because this broker has many competitive advantages. But I don't know about the stock, I fear that in a bear market it will go down with its peers and the rest of the market.
But I don't think the current bull market is over, therefore I'll continue holding TRAD.
Funny thing about brokers - they make money when people buy or sell. Unfortunately, in a bear market, the stock will follow the trend.
TRAD filed an 8K today stating that it entered in an agreement with its management on a severance package if thre is a "change in control" of the company. Sounds like they are preparing themselves for a buyout? Very Interesting.................... :D
Quote from: eggman11 on December 12, 2005, 12:12:54 PM
TRAD filed an 8K today stating that it entered in an agreement with its management on a severance package if thre is a "change in control" of the company. Sounds like they are preparing themselves for a buyout? Very Interesting.................... :D
Yes, quite interesting eggman11 :)
Here's the transcript:
«On December 9, 2005, TradeStation Group, Inc. (the "Company") entered into a Management Continuity Agreement (each, an "Agreement" and, collectively, the "Agreements") with three of the Company's Section 16 officers, namely, David H. Fleischman (Chief Financial Officer, Vice President of Finance, and Treasurer), Joseph Nikolson (President and Chief Operating Officer of TradeStation Securities, Inc., the Company's principal operating subsidiary) and Marc J. Stone (General Counsel, Vice President of Corporate Development, Secretary, and director of the Company's operating subsidiaries) (each, an "Executive"). Each of the Agreements was in the form attached hereto as Exhibit 1. Each Agreement provides for potential severance payments during the 100-day period following a Change in Control, as that term is defined in the Agreements, in an amount equal to up to two years of Executive's annual compensation. The Agreements do not commit the Company to retain any Executive's services for any fixed period of time, do not provide for severance payments unless the Company undergoes a Change in Control, and do not represent new hires or appointments, as each Executive has been serving in his current positions for several years.»
This may fuel speculation about a takeover on TRAD from a bigger online brokerage, E*Trade for example (there would be great synergy, and E*Trade costumers would probably get a much better service over the long run). It makes perfect sense to me, I wish I own TRAD too (well, not some shares, but the company lol).
To temper things, on the agreement it reads: «WHEREAS, it is customary for a company to enter into a management continuity agreement such as this Agreement with its key executives.»
Is it? I don't know, but I think so.
I believe the most important thing behind TRAD's success is their brain power, so if I were to takeover the company it had to be with its key executives.
The words «change in control» may fuel speculation of a takeover and that speculation makes sense because the company is way undervalued and a merger would bring great synergies and promote a better brokerage service for both companies.
Now I have one more motive to hold TRAD:
- It is a takeover candidate.
Unfortunately that 8-K filing didn't fuel takeover speculation on TRAD. It looks like «WHEREAS, it is customary for a company to enter into a management continuity agreement such as this Agreement with its key executives» is true, so no reason for speculation and no impact on the share price.
TRAD went down 1.91% but there was no technical damage to the chart. I'm expecting a general market push to about SPX 1300 until January or so, and I expect TRAD to outperform the market.
I'll continue holding TRAD.
The ETF for the S&P500, SPY, is trading at a new 4 1/2 year high this morning, a little above yesterday's high, which was a short term resistance level.
Remember I'm expecting the SPX to reach 1300, that's where the top of its ascending channel is standing at this moment. The about 2.2% run for the SPX until the end of the year may bring a 10% or more advance for TRAD.
ET broke out to new highs yesterday, maybe today it is TRAD's turn. I'll continue holding it.
Hi, David
There is a rmour that trad may buy ET's daytrade business. This may be the reason for trad to drop.
Wrong chart...but you're doing a fine job! ;D
I mean, really, how hard can it be to keep some 30 something stocks in order? ;D
just kiddin...
Quote from: huayilu on December 15, 2005, 02:53:50 PM
Hi, David
There is a rumor that trad may buy ET's daytrade business. This may be the reason for trad to drop.
Really? The rumor should be the other way around, ET should buy TRAD, it would make a lot more sense. ET has a market cap of $7.92B and TRAD a market cap of $572M.
Thanks for the information :)
Quote from: 422fwhp on December 15, 2005, 04:48:45 PM
Wrong chart...but you're doing a fine job! ;D
I mean, really, how hard can it be to keep some 30 something stocks in order? ;D
just kiddin...
Lol, I was in a hurry, sorry. When something like this happens please send me a private message, thanks :)
TRAD came down to test the ascending trendline again. I wonder when it will breakout on the upside, but I'm pretty positive that it will.
Because I'm in this mood, let me give you an historic revenue chart for TRAD:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=11842;image)
I see steady revenue growth since 2001. 2002 was a bad year for the markets and yet TRAD's revenues grew. 2004 was also a slow year, but, I see revenue growth anyway.
There are a lot more things to study beside revenues to know if this is really a good long term pick, despite the general market behavior, or not. We'll do that on the next updates.
In the meantime, I'll continue holding TRAD.
TRAD yesterday broke the ascending trendline on my chart below on the downside. I see the next support at $12.70.
Here's a chart for historic EPS on TRAD:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=11960;image)
We have steady growth since 2001, which was the worst year on company's history. At present time, the P/E Ratio is 29 and the earnings growth rate is about 36%, so by this measure the company is just a bit undervalued.
It looks like the stock won't be able to sustain this somewhat rich valuation if the market starts to decline, so I'll use technical analysis to trade TRAD. The rule here seems to be: TRAD outperforms the market in bull markets and underperforms in bear markets.
I'll just wait for one more confirmation before I sell TRAD, I need to see that the stock doesn't hold the $12.7 horizontal support. I wish to continue holding TRAD, but if the stock is set to close below $12.70 I'll assume the trend is tunring bearish and I'll take my profits.
QuoteIt looks like the stock won't be able to sustain this somewhat rich valuation if the market starts to decline, so I'll use technical analysis to trade TRAD. The rule here seems to be: TRAD outperforms the market in bull markets and underperforms in bear markets.
I'll just wait for one more confirmation before I sell TRAD, I need to see that the stock doesn't hold the $12.7 horizontal support. I wish to continue holding TRAD, but if the stock is set to close below $12.70 I'll assume the trend is tunring bearish and I'll take my profits.
Unfortunately TRAD was closing below $12.7 so I sold it at price $12.55, taking just 13% in profits. As I suspected the stock turned bearish with the general market and there's nothing we can do about it.
I'll continue monitoring the stock and probably I'll buy it back at lower levels, possibly much lower levels, we'll see about that.
1. Profile
Tradestation Group, Inc. (TRAD). The Group's principal activity is to provide Internet-based securities brokerage for institutional, professional and serious, active individual traders. TradeStation Securities, Inc. and TradeStation Technologies, Inc. are the two operating subsidiaries of the Group. It operates in two segments: Brokerage Services and Software Products and Services. Brokerage services include direct Internet connections to electronic marketplaces, such as electronic communication networks (ECNs) or E-Mini exchanges, where buyers and sellers participating on the network are matched. These services are provided through an electronic trading platform, TradeStation 7. TradeStation Securities, Inc provides brokerage services. The Group also provides subscription services for TradeStation 7 through it's subsidiary, TradeStation Technologies, Inc.
2. Technical Analysis
2.1. Long Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14242;image)
TRAD is trading near its all time high, so no doubt it is bullish long term.
2.2. Medium Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14243;image)
TRAD's medium term chart is very bullish indeed.
2.3. Short Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14244;image)
TRAD is breaking out to a new all time high today with volume above average. The run can be overextended here, but the trend is certainly bullish. The 50 day moving average has provided support in the past. Currently it stands at $13.90.
(as I write the stock is coming off a bit)
3. Fundamental Analysis
3.1. Number of Shares Outstanding
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14245;image)
This graph on historic number of shares outstanding tells me this company is not always asking for more and more investor's money, which is a positive factor.
3.2. Working Capital
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14336;image)
The graph above can be quite misleading, because in 2004 there were some accounting changes at the company: since that date, investor's money at the company started to be accounted as an asset and liability, so the ratio between assets and liabilities (the current ratio) went artificially down. The company has plenty of working capital ($71M) to proceed operations and investments.
3.3. Revenues
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14252;image)
There was only one year on TRAD's history where revenue declined, which was 2001. Since then we see steady YoY revenue growth. Expectations for 2006 are for $115.76M in revenues, so the forward price to sales ratio is $757.33M / $115.76M = 6.54. The industry's price to sales ratio is 4.16.
3.4. EPS
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14253;image)
2001 was really the turning point for TRAD. Since then earnings per share have been consistently growing. The current forward P/E is $17.28/$0.59 = 29.3. The industry's trailing P/E is 24.5.
3.5. Competition
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=14254;image)
I see that TRAD is growing much faster than competition and has about 1/10 or less of the market cap. I know this brokerage quite well and TRAD has many competitive advantages over more "conventional" online brokers.
For instance, it allows for automated trading and system trading. Also, their commissions are lower than the competition. I see TRAD taking market share from its competitors in the future.
4. General Overview
I held TRAD "for the long term" previously, but I sold with about a 20% profit. It was a shame, and the stock now is trading much higher. It seems to be technically overbought, but we know how trends can persist despite of overbought/oversold conditions.
If I want to hold an online brokerage, TRAD must be the one. Its market cap is less than 1/10 the one of its competitors, and revenues and profits are growing faster. The company has unique competitive advantages. The minute it wants to grab market share from competitors, it will, just based on price, if it wants too. But its trading platform is also much more advanced than any other (please make a demo or view their trading platform presentation here (http://www.tradestation.com/default_2.shtm))
They used to charge for their platform, but not anymore, and since it's the best ... I also see TRAD as a takeover candidate from any other major online brokerage house, like Ameritrade or e*Trade (but it would have more potential if it continues alone).
The only risk that I see on a TRAD long term investment is the general market turning bearish. But I think one can't be afraid of a bear market when selecting individual stocks. If the general market turns lower I'll just open a short position at a weaker competitor to hedge things.
5. Trading Plan
I will buy $10,000 of TRAD around today's open for the Long Term on Fire Portfolio. In case we enter a bear market I may sell one of TRAD's weaker competitor's short to hedge my long term specific position on this online brokerage.
TRAD has had a strong year and it's only been a month :o I almost bought around $13 in late December on the pullback to the 50dma :(. An observation on the Long Term Portfolio (LTP). It's only a few weeks old and already 4/10 of the slots are taken. At this rate the portfolio will be full by March and, if all the stocks are held 2-3 years as planned, that would mean any new gems discovered between April 06 and let's say April 2008 could not be bought, at least not for the long term. :o Will be interesting to see how this situation plays out.
I have been investing in TRAD since the first time you recommended it. I am still invested, but I have found that TRAD is very easy to trade in an out of also. 5 times I have sold TRAD at or near its latest high only to be able to buy it back again .50 to 1.00 or even 2.00 lower to catch the next trend upwards. Technically, I have never been as succesfull using technical signals to trade a stock that I like as I have been with TRAD. My most recent entry was at 17.25 and I am long 8000 shares having sold 200 today at 17.70 as I became a little concerned that we would not get through the 17.80s new high. I actually expected it to break to new highs tomorrow but the GOOG news will hurt the market overall so we may see it come back down to the support area in the 17. 20s /30s. I know this is not a thorough analysis but I just wanted to let you know that I find this stock extremely easy to read from the price cycles and have been very successful trading in an out while capturing most of the long-term action. IF I coudl do as well with other stocks I would make zillions!
This is from a free news letter that is delivered to my email door. They say that they receive no compensation for any companies that they reccomend.
As we nervously watch a stock drift downwards it is always good to read a report that says what you believe and hope. Long term up after a small retracement. Personally I got 1/2 in at 16.90 will commit the rest when I see good news and a turn around in the short term trend.
TradeStation (TRAD)
=============================
Why The Strength?
While bull markets benefit all stocks, they're particularly kind to companies that benefit directly from that bull market – brokers and investment houses. TradeStation is an up-and-coming Internet brokerage firm that tailors itself to professional and active investors, with state-of-the-art order execution and data availability, as well as the ability to create and backtest numerous trading strategies for stocks and futures. Business here has always been leveraged to the market's performance – when things are good, the number of trades (and hence,
revenue) booms, and thanks to its all-Internet operations, those higher revenues fall right to the bottom line. Right now, we see revenue growth accelerating, and from previously announced metrics, fourth-quarter growth should come in around 40%. A big market downturn would hurt, of course, but if this bull market persists, TradeStation should do very well.
Technical Analysis
From 1 at the end of the bear market, TRAD spurted ahead to 13 in 2003, as business recovered along with the stock market that year. But then, despite a grudgingly-advancing market in 2004 and much of 2005, this stock corrected and consolidated, building a huge, long base. The breakout didn't come until the end of October, when TRAD bolted to 12, and after testing that level numerous times over the next few weeks, the stock and RP line have shot ahead to new highs on huge volume. Earnings are due out February 14, and that's sure to have an impact on the stock's near-term action. Overall, however, we expect this uptrend to continue. You could buy a little up here, but a quick shakeout toward 15 would offer a great entry level.
Suggested Buy Range: 15-16 1/2
Thanks for your feedback and added comments :)
TRAD may have a pullback here, or not, it doesn't matter for me as a long term investor in the stock. One can't be too concerned with the short term if he wants to invest for the long term. Probably that's why Warren Buffet doesn't have a ticker at his office. He doesn't care how his stocks are doing over the short term.
The same with TRAD. I know this brokerage has competitive advantages and that it will take market share from its competitors every year. The stock, futures and forex markets will never end, and traders will get more and more sophisticated. Trading volume always grows over the long term, so will TRAD's revenues and profits.
I'll continue holding TRAD for the long term.
Although I believe TRAD is a great stock to own on a long term perspective, the stock was overbought when I bought it. As a result we had a correction to the 50 day moving average and I'm losing about 12% on this position.
The 50 day moving average has provided strong support for TRAD in the past, let's see if history repeats itself (it usually does in the stock market) and the stock rebounds from current levels.
I'll continue holding TRAD for the long term whatever happens in the short term.
07:48 TRAD TradeStation beats by a penny, ex items guides for Q1 and FY06 (15.91 )
Reports Q4 (Dec) earnings of $0.14 per share, excluding non-recurring items, $0.01 better than the Reuters Estimates consensus of $0.13; revenues rose 35.3% year/year to $27.3 mln vs the $25.9 mln consensus. Co issues upside guidance for Q1, sees EPS of $0.13-0.15 vs. $0.13 consensus; sees Q1 revs of $28-30 mln vs. $26.25 mln consensus. Co issues guidance for FY06, sees EPS of $0.54-0.65 vs. $0.59 consensus; sees FY06 revs of $119-130 mln vs. $111.43 mln consensus.
07:44 TRAD sees FY06 $0.54-0.65 vs $0.59 Reuters consensus; sees revs $119-130 mln vs $111.4 mln Reuters consensus - 2 analyst ests
07:37 TRAD TradeStation reports January metrics (15.91 )
Co reports the following business metrics for Jan: 59,044 Daily Average Revenue Trades (DARTs), total client assets of $1.4 bln. Year over year, DARTs increased 49% and total client assets increased 18%.
I had a suspicion the gap would not hold so sold just after the open $16.79. I entered on Friday when it bounced off the 50dma so it was a quick swing trade. I am glad earnings did not kill me. I was worried we might get a gap down, but the numbers were good. Good luck long-termers, TRAD should be a solid long term play.
If TRAD can earn $0.60 in 2006, using 30 as its forward PE, it will be fully valued at $18.00.
That explained the sell off after the morning gap up today.
Hi,
With the Dow stocks above 11,000 again ( & I hope they keep above & climb ) broker/dealers will be a great play. TRAD will continue to rise, I believe, 'cause they'll likely be taken out at a premium.
New money from other places should begin to filter into the stock markets now that big caps are finally showing life again.
good trading to all!
willey
Quote from: shawFund on February 15, 2006, 12:25:11 AM
If TRAD can earn $0.60 in 2006, using 30 as its forward PE, it will be fully valued at $18.00.
That explained the sell off after the morning gap up today.
I partially agree shawFund. I agree the stock came down because investors were already expacting good earnings from the company. But I don't know if an earnings multiple of 30 «fully values» TRAD, since income before taxes growth from the year ago levels was 120%.
The stock may come down some more due to people selling the news, but no doubt TRAD stays on track to be an excellent long term investment. Now that their trading platform has no charge I see more and more people migrating to TRAD (in fact, I'll also open an account with them sometime soon, to test some trading systems).
One Tradestation average costumer is worth 50 times more than 1 e*Trade or Ameritrade average costumer in terms of daily average trades (well, today I already made 6 trades on the DAX futures, and this is kind of a slow day, so Velocity Futures clients are worth even more than TRAD's clients, I guess ;D)
I also love the way TRAD presents results, with their monthly business metrics and all.
I think there is a strong possibility the company will continue to beat analyst's forecasts and even its internal forecasts, because as the bull market in equities and commodities hopefully continues, day traders of all kind will flow to the market and they will end at TRAD as the most sophisticated brokerage on the Street. Longer term, if the market is efficient, TRAD will grab more and more market share from its competitors, because it is better and it costs less.
Back to the earnings results, the rise in net margin from 20% to 32% is a very positive development. At the end of the day TRAD is almost a computerized money making machine.
I'll continue holding TRAD for the long term.
fyi:
BUYINS.NET: TradeStation (TRAD) SqueezeTrigger Price Is $9.96. Short Sellers Are Down Approximately $13 Million After Q4 Earnings Beat By $0.03 Per Share.
Tuesday , February 14, 2006 09:53 ET
Feb 14, 2006 (M2 PRESSWIRE via COMTEX) -- BUYINS.NET, www.buyins.net, announced today that the 2 million shares declared short on TradeStation Group (NASDAQ: TRAD) have a SqueezeTrigger Price of $9.96 per share. TradeStation said it earned $7.3 million, or 16 cents a share in the quarter on revenue of $27.3 million. A year ago, the company earned $3.6 million, or 8 cents a share on revenue of $20.2 million. Analysts polled by Thomson Financial had, on average, expected the company to earn 13 cents a share. The company said its pre-tax margin increased to 38% in the 2005 fourth quarter, as compared to a pre-tax margin of 28% in the 2004 fourth quarter. The firm also gave estimates for its first quarter and full year 2006 results. It projects earnings per share of 13 cents to 15 cents and revenue of $28 to $30 million in the first quarter. For the full year, it expects to earn 54 cents to 65 cents a share, on revenue of $119 million to $130 million. Currently, analysts polled by First Call expect the company to earn 13 cents in the first quarter, and 59 cents for the full year. Daily average revenue trades rose 40% to 48,767 from 34,728. Short sellers are down approximately $14 million as the stock is currently trading near $16.30. To access SqueezeTrigger Prices ahead of short squeezes beginning, visit http://www.buyins.net.
From January 2005 to January 2006, an aggregate amount of 21,189,185 shares of TRAD have been shorted for a total dollar value of $211 million. The TRAD SqueezeTrigger price of $9.96 is the volume weighted average price that all shorts are short in shares of TRAD. Since crossing above the SqueezeTrigger Price, shares of TRAD are up nearly 64%. There is still approximately $33 million worth of potential short covering in shares of TRAD.
&
TRAD: Q4 Results 16c vs 8c; Beats 13c Est; Mixes Guidance
Tuesday , February 14, 2006 08:02 ET
QUARTER RESULTS
TradeStation Group Inc (TRAD) reported Q4 results ended December 2005. Q4 Revenues were $27.27M; +35.24% vs yr-ago; BEATING revenue consensus by +5.38%. Q4 EPS was 16c; +100.00% vs yr-ago; BEATING earnings consensus by +23.08%.
Q4 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $27.27M $20.17M +35.24% $25.88M +5.38%
---------- ------------ ------------ ---------- ------------ ----------
EPS: 16c 8c +100.00% 13c +23.08%
---------- ------------ ------------ ---------- ------------ ----------
QUARTERLY GUIDANCE:
Company issues Next-Q Revenue guidance ABOVE consensus estimate, expecting: "Q1 revenues to be $28-30M"
Company issues Next-Q EPS guidance IN-LINE with consensus estimate, expecting: "Q1 EPS tobe 13-15c per diluted share"
YEAR-END RESULTS
Co. also reported Year-End results ended December 2005. FY Revenues were $97.00M; +34.22% vs yr-ago; BEATING revenue consensus by +1.02%. FY EPS was 48c; +45.45% vs yr-ago; BEATING earnings consensus by +6.67%.
FY RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $97.00M $72.27M +34.22% $96.02M +1.02%
---------- ------------ ------------ ---------- ------------ ----------
EPS: 48c 33c +45.45% 45c +6.67%
---------- ------------ ------------ ---------- ------------ ----------
ANNUAL GUIDANCE:
Company issues Coming-YR Revenue guidance ABOVE consensus estimate, expecting: "FY-06 revenues to be $119-130M"
Company issues Coming-YR EPS guidance IN-LINE with consensus estimate, expecting: "FY-06 EPS to be 54-65c per diluted share"
ADDITIONAL COMMENTARY:
OUTLOOK: Q1 revenues to be $28-30M; FY-06 revenues to be $119-130M; Q1 EPS tobe 13-15c per diluted share; FY-06 EPS to be 54-65c per diluted share; Q1 income before taxes to be $9.5-11.0M; FY-06 income before taxes to be $40-48M. HIGHLIGHTS: 2005 fourth quarter record net revenues of $27.3 million, record income before income taxes of $10.3 million, record net income of $7.3 million, record net income per share (diluted) of 16 cents, record brokerage accounts of nearly 24,000, and record daily average revenue trades (DARTs) of nearly 49,000. For the 2005 year, the company reported record net revenues of $97.0 million, record income before income taxes of $32.5 million, record net income of $21.1 million, and record net income per share (diluted) of 48 cents.
>:D >:D
I checked out the web site and was impressed. I am currently using scottrade, They have a lot more features at a comparable price. I am considering opening an account and giving it a try. Has anyone here used this broker? If so are you happy with there service?
Quote from: jlong on February 17, 2006, 04:59:28 AM
I checked out the web site and was impressed. I am currently using scottrade, They have a lot more features at a comparable price. I am considering opening an account and giving it a try. Has anyone here used this broker? If so are you happy with there service?
I still don't have an account with Tradestation, but I have several friends that do, and they say it is simply the best (some of them are system traders and programmers - so naturally, they love it).
The move you and I are about to make will be made by many more, and this is why TRAD will get more and more market share from its competitors.
Good luck, I'll continue holding TRAD for the long term.
This is good news for TRAD: TradeStation Europe Limited Receives FSA Approval (http://biz.yahoo.com/prnews/060228/fltu006.html?.v=44)
Although the stock seems fully valued here, I think it will continue to surprise analysts on the upside over the long term, as it takes more and more market share from its competitors.
I'll continue holding TRAD for the long term.
From the chart, it is developing an ascending trendline.
Once it breaks, $20 is not far away. I may take a new position.
Look back to David's previous picks:
Based on today's closing price, what are the winners if we just hold them long term.
Buy-and-Hold winners are:
1. BIO STOCKS: VPHM, NVAX, AVII, HEB, VRTX, LIFC - bird flu hot topic
2. SEMI STOCKS: BTUI, CIEN, ATML, RMBS, KLIC, AVNX, CNXT, LEXR - semi very hot
3. TECH STOCKS: RHAT, NWRE, ADPT, MSPD, FNSR, TWTC, JDSU, RDCM, GLW - tele hot
4. BROKER: ET, TRAD - of course
5. AIRLINE: AMR, MESA - auto parts will be hot in following months
6. OTHERS WITH GOOD EARNINGS: PETS, HOM, AOB, GIGM,
7. GOLD: KGC, GSS, GOLD
Many gained more than 100% in less than one year. The key is to identify the comanies with earning momentum.
For me, I am most 100% in semi and tech stocks and made very few trades last year. My biggest holding is AMD, MXO, RHAT, STX and LEXR.
I hold more than $300k worth of AMD stocks for more than 2 years and still holding because I believe that AMD will continue taking market shares from INTC. Once trend established, it will be hard to reverse.
I took a POSITION on TRAD today. Market is hot, trading will be hot too, the growth will follow. But I do set up a stop loss.
In the table, the last two columns are today's closing price and the % gain if we just hold them up to today.
Nice post Shawfund. This info gives me more confidence in my trading approach.
I really appreciate it. (appl)
uc.
Thanks for the posting, Shawfund.
As a matter of fact, I noticed this too and I've been trying to hold longer than before.
David made such great picks.
I started trading stocks since last June and luckily I joined 3StocksOnFire right after I started.
I think I've done fairly good for the last 8 months as a newbie and I don't think I could've done it without David and other experts like you.
I thank to all of you who made such a great contribution to this web site and hopefull, I'll be able to give some back to you and other people too in the future.
Good job! ;D ;D ;D
Have not posted but TRAD is stock that is usually easy to make money with as it will trade in a channel and then every now and then, as it did today, break below it. The channel support today was 16.40 and having sold half my position at 17.15 the other day (should have sold 100%) I re-entered at 16.40. Well it traded down almost to the next support area of 15.80, where I entered the last time. Now that we are back into the 16.30 area we need to get above 16.60 in order to resume the climb to new highs. However, I am not convinced that we may not first re-test 15.80 area. Anyway, I am confident that we will get back to $17 plus by end of week if no next week, and this time make a charge at the prior high. If I were buying I would enter below 16.20 and ideally at around 15.80-90 area. The only real risk to this is bad overall market I think
Wow, this one is taking a beating...
TRAD along with AMTD and OXPs are all taking beatings - primarily on back of OXPS weaker than expected report. TRAD has been down here before and doubled inthe 14. 80 are twice in the past month and today once again hitting a low of 14.91. As I write this TRAD is hugging $15 and I expect it will go back to 14.80 area. What I am not sure of is if we hold or start to fall lower. That would be bad and I may have to revist my entire streatgy with TRAD if that happens. When it broke below 16.40 the other day it broke out of it upward channel and now we are hoping to hold medium term support at 14.80, but I am afraid we may have to test the 100 day at 14.11. I have made a lot of money with TRAD so I will continue to hold as long as 14.80 holds. If that breaks I am not sure what I will do. Its too bad its below 50 day EM support of 15.48 which it was above this morning before the sell-off started.
Good luck
Trad is still hugging 14.80 even though other brokerage firms (ie AMTD) are doing well today.
Based on historical pattern, the stock my have started the down trend.
But the down trend will be gradual one. Look at the history, lthe down trend is slower and last longer than up trend with many bounce backs.
Technically, it is due to a rebound after four days of sell off.
TRAD has not performed as well as expected when it was bought to the Long Term on Fire portfolio. It is therefore a good time to take a second look at this position.
Quote from: David Randolph on January 31, 2006, 07:27:56 AM
I held TRAD "for the long term" previously, but I sold with about a 20% profit. It was a shame, and the stock now is trading much higher. It seems to be technically overbought, but we know how trends can persist despite of overbought/oversold conditions.
Unfortunately it seems like the market couldn't resist taking profit:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=17513;image)
Not the best timing for this pick but this is a value portfolio and we will have patience with stocks as long as they are fundamentally attractive.
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=17506;image)
The chart above shows TRAD performance for the last 12 months compared to its direct competitors and SP500. Two interesting observations: The industry is hot and TRAD has performed very well compared to the competitors.
David did an excellent
fundamental analysis (http://www.3stocksonfire.org/trading/index.php?topic=4444.msg43928#msg43928) when 3SOF bought TRAD. There is no reason to repeat this. Instead I will focus on the changes since.
When 3SOF bought TRAD it was traded at a heavy premium compared to the other online brokers: Not so today. PE has fallen from 44.1 to 31.0:
Competitors
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=17509;image)
This is partly because the PPS has gone down and partly because TRAD published excellent earnings for Q4 as reported by
Oliver (http://www.3stocksonfire.org/trading/index.php?topic=4444.msg46389#msg46389)EPS increased significantly during 2005:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=17507;image)
It seem like this trend will continue at least in Q1. The company guided Q1 EPS to be 13-15c per diluted share. I could see them beat that!
Online Brokers have several measures that can be used to assess future earnings. On of them is
DARTs (http://www.tradestation.com/aboutus/businessmetrics.shtm): (Daily Average Revenue Trades). TRAD increased the number of Revenue generating trades with 34% in January and December compared to December last year:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=17514;image)
Total client assets also increased with 7.6% during the first two month of 2006 the highest increase in 12 month. Good sign for Q1 earnings.
TRAD's success is based on its unmatched trading platform. TRAD has won more awards than even the best Scottish whisky:
Best Futures Brokerage 2005 - 2006
Best Direct Access Stock Brokerage 2003 - 2004 - 2005 - 2006
Best Option Analysis Software 2005 - 2006
Best Direct Access Futures Brokerage 2003 - 2004 - 2005 - 2006
Best Professional Platform 2003 - 2004 - 2005 - 2006
Best Institutional Platform 2003 - 2004 - 2005 - 2006
The latest award was from Barrons:
TradeStation Receives Highest Rating - 4-1/2 Stars - In Barron's Magazine's Annual Ranking of Online Brokerage Firms (http://biz.yahoo.com/prnews/060306/nym075.html?.v=29)TRAD's advanced trading platform attracts serious investors. The average TradeStation account traded about 530 times per year, or 44 times per month, the average Ameritrade and E-Trade account traded about 10 times per year, or less than one time per month. Also, TradeStation's average assets per equities account of $81,000 in December was substantially higher than the average assets per account of Ameritrade and E-Trade.
Sector watch Even the best fundamental stock can be dragged down by a correction of the sector and even though the brokerage sector performed excellent in 2005 the chart seems a bit overstretched at this point in time:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=17545;image)
Both RSI and MACD show negative divergence and if the sector fails to break the resistance at 227 we have a double top and might experience a sector correction.
Trading Plan The company seems attractive valued based on its fundamentals and compared to its direct competitors. It has historically grown faster than its competitors and the performance during the first two months of 2006 could indicate that they will surprise to the upside in Q1.
We do however want to limit the risk on this trade. The stock has already not performed as we expected and even though the future seems bright the stock might still be dragged down by a sector wide correction. We will therefore sell TRAD if it closes below 13.50. This should give the stock enough room to show that it deserves our confidence. The Forward earnings are 0.60 cents. With the higher growth it should trade at a premium compared to its direct competitors. With a forward PE of 35 a fair value would be 21. We will sell TRAD if it prints 20.
Disclosure 3SOF has a hold rating on TRAD and if I was a holder of TRAD that is exactly what I would do with a stop loss on 13.50. I like the stock's fundamentals but I want to see how the sector plays out over next week before I initiate a new position.
TRAD sold at 13.46 according to the trading plan.
TRAD is finally moving up with some conviction.
Trad is starting to look good again, going towards the one year high >:D.
For the past months TRAD has been trading in a nice ascending channel. Still hoping for it to break out of it.
Amarens
The "TRAD" Threads in Previous 3SOF Picks
Have been merged.
Got the go ahead to do so from Ramsburg.
I will be working here on this board to merge other threads also.
I will leave you Friday's closing chart while I'm in this thread.......
Good trading to all !
Regards,
Your fellow trader @3SOF
setravis
Updated view.......
TradeStation Group, Inc. Announces the Date of Its 2007 Third Quarter Earnings Conference Call.
WHEN: Tuesday, October 23, 2007
11:00 AM (Eastern Time) / 8:00 AM (Pacific Time)
Could be forming a Head and Shoulders Bottom (reversal) Pattern...
Excellent earnings history.
52wk Range: 9.41 - 16.35
Volume: 598,369
Avg Vol (3m): 495,873
Market Cap: 524.26M
P/E (ttm): 16.50
EPS (ttm): 0.72
Technicals
Close Below the 13-day MA
Last Price Quote is:
-2.85%below 13-day MA
0.61%above 50-day MA
RS Rating: 49
Fundamentals
Earnings Expected on Oct 23
Key Data:
Market Cap (M): $524.27
P/E Ratio: 16.50
PEG Ratio: N/A
Next Earnings: 10/23/2007
Last Analyst Rating: Outperform