Regulators recently gave E*Trade’s bank subsidiary the green light to make a $100 million dividend payment to its parent. No, shareholders won’t get that cash, but the resumption of the payout — expected to be an ongoing $100 million a quarter — means E*Trade can pay down its debt.
Of course, that does nothing to address the problem of growth, which is nowhere to be found. Analysts forecast revenue to decline by more than 11% this year and to continue to shrink in 2014.
Bottom Line: Yes, E*Trade shares bounced back sharply as the company swung back to profitability — but the easy money in this resurrection play has already been made. The stock is up more than 90% for the year-to-date. Why be greedy? Sell at least part of you position and be thankful for the profits.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.