The Long Case for ThinkorSwim Group

There is a substantial disconnect between ThinkorSwim Group’s (SWIM) intrinsic value and current market value. ThinkorSwim has ranked as the #1 or #2 software-based online broker and "best for options traders" by Barron’s for the past three years. The company has a best in breed trading platform with a differentiated approach to customer service (customer service staff comprised primarily of former Chicago Board of Options Exchange floor traders). Further, 80% of its daily average revenue trades are derived from the fastest growing and most recurring (think monthly expirations) source of retail trading: equity options. ThinkorSwim’s existing account base has higher than average balances and trades more frequently than its peer group.

Despite these positive attributes, and others such as the highest revenue growth rate for the brokerage sector, and the lowest new account acquisition costs, ThinkorSwim trades at a significant discount to its peer group.