From Briefing.com :
E*Trade Group (EGRP) 26 15/16 +1 3/16: E*Trade is at it again today as it has taken another step to set itself apart from its competition. Investors seem to appreciate the company's efforts as its stock is up nearly 5% while most of its direct competitors are trading in lackluster fashion. The catalyst for the positive bias was E*Trade's announcement that it had signed a definitive agreement to buy Card Capture Services, a network of 8500 automated teller machines located in 48 states and three countries, which not only provides a nice complement to its newly acquired banking subsidiary, Telebank, but serves as yet another example of E*Trade's effort to become more than just a portal for trading stocks. While E*Trade has made a name for itself through its online trading operations, management continues to demonstrate that it "gets it" when it comes to understanding what it will take to be a long-term survivor in the increasingly competitive space of online financial services-- diversity in product offerings and revenue streams as well as providing customers with a menu of value added services that will lead to increased loyalty. Charles Schwab (SCH) is another standout in that respect. As for E*Trade, the acquisition of an ATM network should prove to be a winning strategy as it will increase its competitive presence in the banking market while providing it with added visibility from a marketing and cross-selling standpoint. In addition, this new feather in its cap could heighten its appeal as an acquisition candidate given that brick-and-mortar banks and brokerages are looking for ways to increase their Internet presence without bleeding red ink in those efforts for years to come. That said, profitability at E*Trade remains elusive as the company is expected to lose $0.50 per share this year and $0.16 per share in FY01. Nevertheless, E*Trade provides that "quick strike" appeal as it already has the brand name recognition, the growing customer base, and the right fit of product offerings. Moreover, the move toward profitability is gaining momentum as evidenced by the aforementioned estimates. Of course, takeover specualtion is just that, but regardless of what happens, it would appear that E*Trade investors have reason to be optimistic as management is positioning the company to be a viable and successful competitor in its own right.-- PJO |
