To: PaperProphet who wrote (95 ) 3/30/1998 8:57:00 PM From: george K. Read Replies (2) | Respond to
Ameritrade is a very good company suffering from self-inflicted wounds due to its exponential growth. However, the problems will work themselves out and the stock will move upwards. Why does this stock seem overvalued to you at 27 1/4? If you look at the numbers the company put up with half the number of accounts it currently has, you will see that AMTD earned near $1.00 when it had only 100,000 accounts. After this quarter, you will see that total closer to 190,000 accounts. The revenue from these new accounts will be generated over the next few quarters after the accounts have been firmly established and all funds transferred in. Sure, margins are lower, but there are still many various ways to earn money from accounts. You will see that once Ameritrade slows its advertising budget, the bottom line will zoom! Meanwhile, the company continues to add account at an incredible rate.
