TD Ameritrade (AMTD) — This online discount broker has been in a powerful uptrend since it broke from a double-top in April 2013 at $22.
This year, S&P upgraded the stock from “hold” to “buy,” and in April, it increased its price target by $7 to $42. This was based on improving investor confidence and continued asset growth. The company reported new client assets grew 8% year over year in the fiscal second quarter, and it saw a record number of average client trades per day. Consensus estimates are for earnings of $1.43 per share in fiscal 2014 (ending in September) and $1.67 in fiscal 2015.
Since its breakout last April, the stock has consolidated within a broad triangle with a bottom at just over $29. On Thursday, AMTD reversed from its 200-day moving average and flashed a buy signal from my proprietary indicator, the Collins-Bollinger Reversal (CBR), as it broke through the resistance line at $30. MACD is also on a buy signal.
The trading target for AMTD is $35, but investors may find this stock is a solid value and could exceed S&P’s 12-month target of $42. The company pays a $0.12 quarterly dividend for a current yield of 1.6%.