Vanderbilt Investment Club

Slides:

Advertisements

Similar presentations

An Introduction to. An Introduction to What are Mutual Funds? Mutual funds are a type of investment that takes money from many investors and uses it.

Advertisements

To play, start slide show and click on circle Yellow OrangeGreenPurplePink

Investment Basics A Guide to Your Investment Options Brian Doughney, CFP® Wealth Management Senior Manager.

CHAPTER 4: INVESTMENT COMPANIES.  Definition: financial intermediaries that collect funds from individual investors and invest those funds in a potentially.

Savings and Investing.

P.V. VISWANATH FOR A FIRST COURSE IN INVESTMENTS.

1 Ameritrade, Inc., member NASD/SIPC. Ameritrade, Inc. is a subsidiary of Ameritrade Holding Corporation. Ameritrade and Ameritrade logo are trademarks.

Selecting Stocks Personal Finance. How hard is it to pick a stock? “ Everyone has the brain power to follow the stock market. If you made it through fifth-grade.

Saving and Investing April How to Select a Savings Plan 1. Decide whether to save or invest. 2. Can you withdraw money from this savings plan? 3.

An Introduction to Mutual Funds

Investment Vocabulary. Appreciation O An increase in the basic value of an investment.

L EARNING, E ARNING, AND I NVESTING FOR A N EW G ENERATION © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY The Language of Financial Markets: Quiz.

YOUR FINANCIAL FUTURE REVIEW. CREDIT & DEBT COSTS OF USING CREDIT  Interest can be costly when the balance is revolved  Additional penalty or fees 

L EARNING, E ARNING, AND I NVESTING FOR A N EW G ENERATION © C OUNCIL FOR E CONOMIC E DUCATION, N EW Y ORK, NY W HAT ARE M UTUAL F UNDS ?

Investment Companies  What are they?  Financial intermediaries that invest the funds of individual investors in securities or other assets.

Bank Financials “Needle Movers”. Today’s Agenda 1.The “business” of banking – how Banks make money 2.Financial statements 3.How each area can.

Generating Wealth With Private Lending My Company.

Intensive Actuarial Training for Bulgaria January 2007 Lecture 15 – Principles and Types of Investment By Michael Sze, PhD, FSA, CFA.

Chapter 11 Financial Markets and Investing Investing Investing – the act of redirecting resources from consumption today so that they may create additional.

Becoming a Millionaire: Savings and Investments. 2 Starting a Savings Plan.

Investments Who wants to be a millionaire?. What kind of an investor are you?  Rate all investment options according to three characteristics:  Safety.

 Private Corporations – shares of stock are NOT openly traded in stock markets  Public Corporations – sells shares openly where anyone can buy them.

The Fundamentals of Investing

The Stock Market Understand the risks Describe how stocks are traded

Power Income Portfolio For more information call:

S LIDE 1.1 The Language of Financial Markets Quiz Bowl Game Board Invest in This Potent Investments Index or Exchange Earn It Who am I? Financial Markets.

Ch. 11: Financial Markets. What to do with money: Make a list of as many places you can think of that you could invest money...

Arya Jhaveri Rishab Negi

Motiwala Capital LLC Adib Motiwala Motiwala Capital LLC

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. A Closer Look at Financial Institutions and Financial Markets Chapter 27.

Investment Basics Stock & Bond Basics Mutual Fund Basics Retirement PlanningBuying a Home

Unit 3 - Investing: Making Money Work for You. UniqueSavingsFeatures UniqueInvestmentFeatures CommonFeatures Short-term Low risk Earns small amount of.

Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Valuation and Rates of Return 10.

Today’s Objectives Hand back and Review Tests Test Corrections in Groups (Assigned already) Begin Notes on Chapter 8 – Banking You will… – Understand your.

Savings & Investment Vehicles Mike Meade. Saving vs. Investing Saving o Putting money away for safe-keeping o Emergency funds o Zero risk Investing o.

1 Valuing the Enterprise: Free Cash Flow Valuation Discount estimates of free cash flow that the firm will generate in the future. WACC: after-tax weighted.

Building Bucks Savings and Investment Basics. Basics Saving – provides funds for emergencies and for making specific purchases in the near future Investing.

$$$. Bank’s income portfolio Fee Based Income - Also called Interest Income A A Accepting Deposits and Lending Loans at Different Interest Rates B B Deposit.

Chapter McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Valuation and Rates of Return 10.

© 2012 Regents of the University of Minnesota. All rights reserved.

BANKING.  Banking is a combination of businesses designed to deliver the services  Pool the savings of and making loans  Diversification  Access to.

An Introduction to What are Mutual Funds?  Mutual funds are a type of investment that takes money from many investors and uses it to make investments.

Alli Watkins. What are bonds? Bonds are like loans, where you are the lender and the government or big companies is the borrower. They are NOT INSURED.

Safe Harbor Statement This presentation contains forward-looking statements regarding future events or the future performance of the Company.

Analyzing Financial Statements

Major Financial Institutions.  Banks and Credit Unions  Federal Reserve  Types of Business:  Sole Proprietorship, Partnerships, and Corporations 

Welcome to MnR Capital MANAGEMENT Family. Wealth Management Equity Derivatives Debentures Currencies Bonds Commodities Mutual Funds Insurance Fixed Deposits.

Objective the objective is – to learn and understand basic investing principles and how the stock market works – current events, – the basics of how the.

Research and Evaluation 4.1 INVESTMENT PRINCIPLES.

G1 Introduction to Investing Financial Literacy.

Chapter 8 Money, Banking, Saving, and Investing. Moneymoneymoneymoney! Money!

I have little confidence even in the ability of analysts, let alone untrained investors, to select common stocks that will give better than average results.

 Fundamental Analysis By Martin Brenner. What is Fundamental Analysis?  A method of evaluating a security that entails attempting to measure its intrinsic.

Managing Money 4.

An Introduction to Investing Your Money Source: CTAinvest.org.

Managing Your Investments Chapter 11 Page 259 Personal investing – using your savings to earn a financial return

Methods of Investing. Why Invest? 0 What does investment mean? 0 An investment is something that you acquire with the goal of making money! 0 This begins.

Mutual funds are investments in securities – such as bonds, stocks, etc. – that pool money from multiple investors. The investments are controlled by.

Stock Terminology (continued) Investors make money in stocks in two ways: –Dividends Companies may make payment to shareholders as part of the profits.

McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved The Federal Reserve System Chapter 14.

Advanced Level G1 © Take Charge Today – August 2013 – The Fundamentals of Investing– Slide 2 Funded by a grant from Take Charge America, Inc. to.

Investment Planning Chapter 11. Investing Placing money in some medium such as stocks, bonds or real estate in the expectation of receiving some future.

Chapter 2 Buying and Selling Securities. 2-2 Buying and Selling Securities “Take all your savings and buy some good stock and hold it till it goes up.

Review Fundamental analysis is about determining the value of an asset. The value of an asset is a function of its future dividends or cash flows. Dividends,

Common Stocks: Analysis and Strategy (chapter 11)

Personal Finance Stocks (Equities)

Managing Non-Interest Income & Non-Interest Expense

Recommendation We recommend longing AvalonBay [AVB] because it is undervalued by 20-30%, and its stock price could increase significantly in the next.

Trading platforms Zili Zhou.

Financial Service Solutions

Presentation transcript:

Vanderbilt Investment Club Jeremy Thames Vanderbilt Investment Club Thaxston McKee, Dean Sisun, Brian Alter, Michael Hite, Kalan Patel, Alex Roed, & Aimee Kawabata “If only there was a business without the intricacies of a bank that could make money like a bank…” - Someone not familiar with TD Ameritrade Vanderbilt Investment Club

Vanderbilt Investment Club Investment Thesis Ultra High Quality Business Efficient Asset Gatherer Massive Operating Leverage Relationship with TD Bank Gives Them NIM Upside Without the Capital Requirements of a Bank Advised Asset Business is Growing Very Quickly and Provides Earnings at Very High Margins Vanderbilt Investment Club

Vanderbilt Investment Club What Ameritrade Does Online Brokerage Platform Trading Stocks, Options, ETFs, Mutual Funds, etc. For Individuals and RIAs Advised Portfolios for Clients Cash Management through Sweep Services to TD Bank $653 Billion in Client Assets Vanderbilt Investment Club

Vanderbilt Investment Club Management Team CEO – Fred Tomczyk, since 2008, came over from TD Bank, over half of comp in RSUs CFO – Bill Gerber, at AMTD since 1999, more than half of comp in RSUs Joe Ricketts – Ricketts family owns 11% of the company, Joe stepped down from board in 2011 Vanderbilt Investment Club

Vanderbilt Investment Club Capital Allocation Debt/EBITDA levels have been between 0.8 and 1.2 since pre-crisis Aggressive Buybacks since 2010 18.9 million shares remaining under authorization Buybacks will remain a part of the allocation strategy Vanderbilt Investment Club

Relationship with TD Bank TD Bank owns 41% of Ameritrade Stake has increased due to buybacks Ameritrade sweeps idle client cash to TD Bank TD Bank pays a fee based on the spread they can earn on that cash Ameritrade makes money like a bank but doesn’t have to hold capital against deposits Vanderbilt Investment Club

Relationship with TD Bank TD Bank pays Ameritrade an aggregate marketing fee based on the weighted average yield earned on the client insured deposit account balances, less the actual interest paid to clients Interest paid to clients is based on the nature and scope of the client’s relationship with Ameritrade Essentially, TD Bank pays Ameritrade to gather deposits for them Vanderbilt Investment Club

Relationship with TD Bank TD Bank’s ownership was capped at 42%, now 45% New agreement gives AMTD flexibility to continue buying back stock TD Bank must liquidate ownership stake in excess of 45% Bottom line: the buybacks can continue! Vanderbilt Investment Club

Vanderbilt Investment Club Revenue: Commissions Client Trading $9.99 per Trade Deals for High Volume Traders 43% of 2014 Revenue Trading Activity is Best in Class Market Leader in Trading Activity per Client Account Trades per Account is flat since 2009, Competitors down Ameritrade has shown resistance to secular trend of less trading Vanderbilt Investment Club

Vanderbilt Investment Club Attracting Traders Best in Class Platform Rated best online stock broker 3 years running Even with higher per trade fees ThinkorSwim Platform for High Volume Traders Lots of features that Traders seem to love “The broker charges $9.99 per trade a rate that can be up to two times more than some of the cheaper discount brokers but the value and quality delivered is so superior that is easily justifies the higher price tag. Our TD Ameritrade review shows they are the real deal.” - StockBrokers.com Vanderbilt Investment Club

Revenue: Interest Margin Client Cash Management Sweep Feature to TD Bank Money Market Funds or Deposit Accounts TD Bank pays AMTD based on Interest Spread Securities Lending and Margin Lending In Current Rate Environment, this segment is hugely Under-Earning Vanderbilt Investment Club

Vanderbilt Investment Club

Vanderbilt Investment Club Revenue: Product Fees Advised Assets Growing faster than 20% Fees are Holding Stable at ~24 bps Secular Tailwind Towards Advised Portfolios ETF and Mutual Fund Trading Platform Charge Funds to be Listed on their Platform Tremendous Bargaining Power Ultra High Margin Business Vanderbilt Investment Club

Valuation: Normalization TD Ameritrade is worth a multiple of its normalized earning power Normalized Trading Commissions are lower as a % of assets than today as the secular headwind continues Normalized Interest Margin is at the level it was in 2008 as a % of assets, implies about a 3% Fed Funds Rate Normal Product Fees assumes long run level of 35% of assets under advice Total Client Asset growth slows to long term rate of 7% Vanderbilt Investment Club

Vanderbilt Investment Club Valuation: 12.5x EBITA Almost all fixed cost business > 400% Returns on Capital Upside of a bank without the mess Excellent management team that loves buying back stock Long Term Invested Assets grow at 7%, huge advantage for Ameritrade Vanderbilt Investment Club

Vanderbilt Investment Club Risks Pricing Pressure in the Trading Commissions Space Very Competitive Industry, but Scale is Everything Dependence on Relationship with TD Bank ZIRP is Weird Vanderbilt Investment Club