Intrinsic value of TD Ameritrade Holding - AMTD

Previous Close

$48.27

  Intrinsic Value

$110.45

stock screener

  Rating & Target

str. buy

+129%

Previous close

$48.27

 
Intrinsic value

$110.45

 
Up/down potential

+129%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as AMTD.

We calculate the intrinsic value of AMTD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 25.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.46
  11.10
  10.49
  9.94
  9.45
  9.00
  8.60
  8.24
  7.92
  7.63
  7.36
  7.13
  6.91
  6.72
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
Revenue, $m
  3,327
  3,696
  4,084
  4,490
  4,914
  5,357
  5,817
  6,297
  6,795
  7,314
  7,852
  8,412
  8,993
  9,598
  10,227
  10,881
  11,561
  12,270
  13,008
  13,778
  14,580
  15,418
  16,291
  17,204
  18,157
  19,153
  20,195
  21,284
  22,424
  23,617
  24,865
Variable operating expenses, $m
 
  2,161
  2,362
  2,572
  2,792
  3,021
  3,259
  3,508
  3,766
  4,034
  4,313
  4,356
  4,657
  4,970
  5,296
  5,635
  5,987
  6,354
  6,736
  7,135
  7,550
  7,984
  8,436
  8,909
  9,403
  9,918
  10,458
  11,022
  11,612
  12,230
  12,876
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,009
  2,161
  2,362
  2,572
  2,792
  3,021
  3,259
  3,508
  3,766
  4,034
  4,313
  4,356
  4,657
  4,970
  5,296
  5,635
  5,987
  6,354
  6,736
  7,135
  7,550
  7,984
  8,436
  8,909
  9,403
  9,918
  10,458
  11,022
  11,612
  12,230
  12,876
Operating income, $m
  1,318
  1,535
  1,722
  1,918
  2,123
  2,336
  2,558
  2,789
  3,030
  3,280
  3,539
  4,056
  4,336
  4,628
  4,931
  5,246
  5,574
  5,916
  6,272
  6,643
  7,030
  7,434
  7,855
  8,295
  8,754
  9,235
  9,737
  10,262
  10,812
  11,387
  11,989
EBITDA, $m
  1,496
  1,845
  2,038
  2,241
  2,452
  2,673
  2,903
  3,142
  3,391
  3,650
  3,919
  4,198
  4,488
  4,790
  5,104
  5,430
  5,770
  6,123
  6,492
  6,876
  7,276
  7,694
  8,130
  8,585
  9,061
  9,558
  10,078
  10,622
  11,191
  11,786
  12,409
Interest expense (income), $m
  54
  64
  158
  256
  357
  464
  575
  690
  810
  935
  1,065
  1,200
  1,340
  1,486
  1,638
  1,795
  1,959
  2,130
  2,308
  2,493
  2,686
  2,887
  3,097
  3,316
  3,545
  3,784
  4,033
  4,294
  4,567
  4,853
  5,152
Earnings before tax, $m
  1,265
  1,472
  1,564
  1,663
  1,765
  1,872
  1,984
  2,099
  2,219
  2,344
  2,474
  2,856
  2,996
  3,141
  3,293
  3,451
  3,615
  3,786
  3,964
  4,150
  4,344
  4,547
  4,758
  4,979
  5,210
  5,451
  5,704
  5,968
  6,244
  6,534
  6,837
Tax expense, $m
  423
  397
  422
  449
  477
  506
  536
  567
  599
  633
  668
  771
  809
  848
  889
  932
  976
  1,022
  1,070
  1,121
  1,173
  1,228
  1,285
  1,344
  1,407
  1,472
  1,540
  1,611
  1,686
  1,764
  1,846
Net income, $m
  842
  1,074
  1,142
  1,214
  1,289
  1,367
  1,448
  1,532
  1,620
  1,711
  1,806
  2,085
  2,187
  2,293
  2,404
  2,519
  2,639
  2,764
  2,894
  3,030
  3,171
  3,319
  3,473
  3,635
  3,803
  3,979
  4,164
  4,356
  4,558
  4,769
  4,991

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,855
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  28,818
  30,051
  33,204
  36,504
  39,953
  43,549
  47,296
  51,194
  55,247
  59,460
  63,838
  68,388
  73,116
  78,032
  83,143
  88,461
  93,995
  99,757
  105,760
  112,016
  118,540
  125,346
  132,450
  139,868
  147,618
  155,717
  164,185
  173,041
  182,307
  192,004
  202,156
Adjusted assets (=assets-cash), $m
  26,963
  30,051
  33,204
  36,504
  39,953
  43,549
  47,296
  51,194
  55,247
  59,460
  63,838
  68,388
  73,116
  78,032
  83,143
  88,461
  93,995
  99,757
  105,760
  112,016
  118,540
  125,346
  132,450
  139,868
  147,618
  155,717
  164,185
  173,041
  182,307
  192,004
  202,156
Revenue / Adjusted assets
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
  0.123
Average production assets, $m
  1,142
  1,268
  1,401
  1,540
  1,686
  1,837
  1,995
  2,160
  2,331
  2,509
  2,693
  2,885
  3,085
  3,292
  3,508
  3,732
  3,966
  4,209
  4,462
  4,726
  5,001
  5,288
  5,588
  5,901
  6,228
  6,570
  6,927
  7,300
  7,691
  8,100
  8,529
Working capital, $m
  0
  -2,063
  -2,279
  -2,505
  -2,742
  -2,989
  -3,246
  -3,514
  -3,792
  -4,081
  -4,381
  -4,694
  -5,018
  -5,356
  -5,706
  -6,071
  -6,451
  -6,847
  -7,259
  -7,688
  -8,136
  -8,603
  -9,091
  -9,600
  -10,132
  -10,687
  -11,269
  -11,876
  -12,512
  -13,178
  -13,875
Total debt, $m
  1,817
  4,525
  7,302
  10,210
  13,248
  16,417
  19,717
  23,152
  26,723
  30,434
  34,291
  38,300
  42,466
  46,796
  51,299
  55,984
  60,859
  65,936
  71,224
  76,736
  82,484
  88,480
  94,738
  101,274
  108,101
  115,237
  122,697
  130,499
  138,662
  147,206
  156,149
Total liabilities, $m
  23,767
  26,475
  29,252
  32,160
  35,198
  38,367
  41,667
  45,102
  48,673
  52,384
  56,241
  60,250
  64,416
  68,746
  73,249
  77,934
  82,809
  87,886
  93,174
  98,686
  104,434
  110,430
  116,688
  123,224
  130,051
  137,187
  144,647
  152,449
  160,612
  169,156
  178,099
Total equity, $m
  5,051
  3,576
  3,951
  4,344
  4,754
  5,182
  5,628
  6,092
  6,574
  7,076
  7,597
  8,138
  8,701
  9,286
  9,894
  10,527
  11,185
  11,871
  12,585
  13,330
  14,106
  14,916
  15,762
  16,644
  17,567
  18,530
  19,538
  20,592
  21,695
  22,848
  24,057
Total liabilities and equity, $m
  28,818
  30,051
  33,203
  36,504
  39,952
  43,549
  47,295
  51,194
  55,247
  59,460
  63,838
  68,388
  73,117
  78,032
  83,143
  88,461
  93,994
  99,757
  105,759
  112,016
  118,540
  125,346
  132,450
  139,868
  147,618
  155,717
  164,185
  173,041
  182,307
  192,004
  202,156
Debt-to-equity ratio
  0.360
  1.270
  1.850
  2.350
  2.790
  3.170
  3.500
  3.800
  4.060
  4.300
  4.510
  4.710
  4.880
  5.040
  5.180
  5.320
  5.440
  5.550
  5.660
  5.760
  5.850
  5.930
  6.010
  6.080
  6.150
  6.220
  6.280
  6.340
  6.390
  6.440
  6.490
Adjusted equity ratio
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  842
  1,074
  1,142
  1,214
  1,289
  1,367
  1,448
  1,532
  1,620
  1,711
  1,806
  2,085
  2,187
  2,293
  2,404
  2,519
  2,639
  2,764
  2,894
  3,030
  3,171
  3,319
  3,473
  3,635
  3,803
  3,979
  4,164
  4,356
  4,558
  4,769
  4,991
Depreciation, amort., depletion, $m
  178
  309
  316
  323
  330
  337
  345
  353
  362
  370
  379
  142
  152
  162
  173
  184
  195
  207
  220
  233
  246
  261
  275
  291
  307
  324
  341
  360
  379
  399
  420
Funds from operations, $m
  1,890
  1,384
  1,457
  1,536
  1,618
  1,704
  1,793
  1,886
  1,982
  2,082
  2,185
  2,227
  2,339
  2,455
  2,577
  2,703
  2,834
  2,971
  3,114
  3,262
  3,418
  3,580
  3,749
  3,925
  4,110
  4,303
  4,505
  4,716
  4,937
  5,169
  5,411
Change in working capital, $m
  422
  -206
  -216
  -227
  -237
  -247
  -257
  -268
  -278
  -289
  -300
  -312
  -325
  -337
  -351
  -365
  -380
  -395
  -412
  -429
  -448
  -467
  -488
  -509
  -532
  -556
  -581
  -608
  -636
  -666
  -697
Cash from operations, $m
  1,468
  1,590
  1,674
  1,763
  1,855
  1,951
  2,050
  2,153
  2,260
  2,371
  2,486
  2,539
  2,663
  2,793
  2,927
  3,068
  3,214
  3,367
  3,526
  3,692
  3,865
  4,047
  4,236
  4,434
  4,642
  4,859
  5,086
  5,324
  5,573
  5,834
  6,108
Maintenance CAPEX, $m
  0
  -56
  -62
  -69
  -76
  -83
  -91
  -98
  -106
  -115
  -124
  -133
  -142
  -152
  -162
  -173
  -184
  -195
  -207
  -220
  -233
  -246
  -261
  -275
  -291
  -307
  -324
  -341
  -360
  -379
  -399
New CAPEX, $m
  -105
  -126
  -133
  -139
  -145
  -152
  -158
  -164
  -171
  -178
  -185
  -192
  -199
  -207
  -216
  -224
  -233
  -243
  -253
  -264
  -275
  -287
  -300
  -313
  -327
  -342
  -357
  -374
  -391
  -409
  -428
Cash from investing activities, $m
  -863
  -182
  -195
  -208
  -221
  -235
  -249
  -262
  -277
  -293
  -309
  -325
  -341
  -359
  -378
  -397
  -417
  -438
  -460
  -484
  -508
  -533
  -561
  -588
  -618
  -649
  -681
  -715
  -751
  -788
  -827
Free cash flow, $m
  605
  1,407
  1,478
  1,555
  1,634
  1,716
  1,802
  1,890
  1,982
  2,078
  2,178
  2,214
  2,322
  2,433
  2,550
  2,671
  2,797
  2,928
  3,065
  3,208
  3,357
  3,513
  3,676
  3,846
  4,024
  4,210
  4,405
  4,609
  4,823
  5,046
  5,280
Issuance/(repayment) of debt, $m
  0
  2,708
  2,777
  2,908
  3,038
  3,169
  3,300
  3,434
  3,571
  3,712
  3,857
  4,008
  4,166
  4,331
  4,503
  4,685
  4,875
  5,077
  5,288
  5,512
  5,748
  5,996
  6,259
  6,535
  6,827
  7,135
  7,460
  7,802
  8,163
  8,543
  8,944
Issuance/(repurchase) of shares, $m
  -382
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -366
  2,708
  2,777
  2,908
  3,038
  3,169
  3,300
  3,434
  3,571
  3,712
  3,857
  4,008
  4,166
  4,331
  4,503
  4,685
  4,875
  5,077
  5,288
  5,512
  5,748
  5,996
  6,259
  6,535
  6,827
  7,135
  7,460
  7,802
  8,163
  8,543
  8,944
Total cash flow (excl. dividends), $m
  239
  4,115
  4,256
  4,463
  4,672
  4,885
  5,102
  5,324
  5,553
  5,790
  6,035
  6,223
  6,488
  6,764
  7,053
  7,355
  7,672
  8,005
  8,354
  8,720
  9,105
  9,509
  9,935
  10,382
  10,852
  11,346
  11,865
  12,411
  12,986
  13,589
  14,224
Retained Cash Flow (-), $m
  -148
  -380
  -375
  -393
  -410
  -428
  -446
  -464
  -482
  -501
  -521
  -541
  -563
  -585
  -608
  -633
  -659
  -686
  -714
  -744
  -776
  -810
  -845
  -883
  -922
  -964
  -1,008
  -1,054
  -1,103
  -1,154
  -1,208
Prev. year cash balance distribution, $m
 
  1,855
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,590
  3,880
  4,070
  4,262
  4,457
  4,656
  4,861
  5,071
  5,289
  5,514
  5,681
  5,925
  6,179
  6,445
  6,723
  7,014
  7,319
  7,639
  7,975
  8,329
  8,699
  9,089
  9,499
  9,929
  10,382
  10,858
  11,358
  11,883
  12,435
  13,016
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  5,360
  3,552
  3,542
  3,509
  3,454
  3,379
  3,284
  3,170
  3,038
  2,891
  2,698
  2,528
  2,349
  2,164
  1,974
  1,782
  1,592
  1,407
  1,228
  1,058
  900
  754
  623
  506
  404
  317
  244
  184
  136
  98
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

TD Ameritrade Holding Corporation is a provider of securities brokerage services and related technology-based financial services. The Company provides its services to retail investors, traders and independent registered investment advisors (RIAs). The Company provides its services through the Internet, a national branch network and relationships with RIAs. The Company's products and services include common and preferred stock, exchange-traded funds, options, futures, foreign exchange, mutual funds, fixed income, new and secondary issue securities, margin lending, cash management services and annuities. The Company uses its platform to offer brokerage services to retail investors and investment advisors. In addition, it also offers various products and services to retail clients, such as touch-tone trading, trading over the Internet, real-time quotes, extended trading hours and direct access to market destinations.

FINANCIAL RATIOS  of  TD Ameritrade Holding (AMTD)

Valuation Ratios
P/E Ratio 30.2
Price to Sales 7.6
Price to Book 5
Price to Tangible Book
Price to Cash Flow 17.3
Price to Free Cash Flow 18.6
Growth Rates
Sales Growth Rate 2.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 47.9%
Cap. Spend. - 3 Yr. Gr. Rate -6.1%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 36%
Total Debt to Equity 36%
Interest Coverage 24
Management Effectiveness
Return On Assets 3.2%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital 12.4%
Ret/ On T. Cap. - 3 Yr. Avg. 12.9%
Return On Equity 16.9%
Return On Equity - 3 Yr. Avg. 16.8%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 33.3%
EBITDA Margin 45%
EBITDA Margin - 3 Yr. Avg. 46.2%
Operating Margin 39.6%
Oper. Margin - 3 Yr. Avg. 40.5%
Pre-Tax Margin 38%
Pre-Tax Margin - 3 Yr. Avg. 39.4%
Net Profit Margin 25.3%
Net Profit Margin - 3 Yr. Avg. 25.2%
Effective Tax Rate 33.4%
Eff/ Tax Rate - 3 Yr. Avg. 36.1%
Payout Ratio 43%

AMTD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMTD stock intrinsic value calculation we used $3327 million for the last fiscal year's total revenue generated by TD Ameritrade Holding. The default revenue input number comes from 2016 income statement of TD Ameritrade Holding. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AMTD stock valuation model: a) initial revenue growth rate of 11.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for AMTD is calculated based on our internal credit rating of TD Ameritrade Holding, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of TD Ameritrade Holding.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AMTD stock the variable cost ratio is equal to 59.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AMTD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for TD Ameritrade Holding.

Corporate tax rate of 27% is the nominal tax rate for TD Ameritrade Holding. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AMTD stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AMTD are equal to 34.3%.

Life of production assets of 20.3 years is the average useful life of capital assets used in TD Ameritrade Holding operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AMTD is equal to -55.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5051 million for TD Ameritrade Holding - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 528.071 million for TD Ameritrade Holding is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of TD Ameritrade Holding at the current share price and the inputted number of shares is $25.5 billion.

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RJF Raymond James 86.63 484.28  str.buy
SEIC SEI Investment 63.70 33.56  sell

COMPANY NEWS

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▶ Understanding TD Ameritrades Valuations   [Sep-14-17 07:38AM  Market Realist]
▶ TD Ameritrade: Projected Total Dividends in Fiscal 2017   [Sep-13-17 10:37AM  Market Realist]
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▶ TD Ameritrade Witnessed Rise in Fee-Based Revenues   [Sep-12-17 01:05PM  Market Realist]
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▶ TD Ameritrade Reports Monthly Metrics   [08:30AM  Business Wire]
▶ Why Charles Schwabs Investor Services Net Revenues Rose   [Sep-11-17 10:36AM  Market Realist]
▶ TD Ameritrade's Tom Bradley Departing   [Sep-08-17 02:48PM  Barrons.com]
▶ TD Ameritrade clients playing volatility in September   [Sep-05-17 03:40PM  CNBC Videos]
▶ TD Ameritrade Ups its 'Bot' Game   [Aug-22-17 05:22PM  Barrons.com]
▶ TD Ameritrade Reports Monthly Metrics   [Aug-09-17 08:30AM  Business Wire]
▶ These Were The Most Bought And Sold Stocks In July   [Aug-07-17 04:32PM  Benzinga]
▶ Online Brokerage TD Ameritrade Innovates Faster Under CIO's Helm   [Jul-24-17 09:36AM  The Wall Street Journal]
▶ Benzinga's Option Alert Recap From July 19   [Jul-19-17 04:18PM  Benzinga]
Financial statements of AMTD
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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