Are Discount Broker Shares Worth Owning? Depends Which One

The third quarter was a favorable one for the longs. Except for a few short-lived, minor pullbacks stock prices moved higher through the quarter. Stock price volatility declined, takeover activity rose, and risk appetite improved to help the S&P gain 15%.

Recently I commented on the seemingly unfathomable transactions of large financial services firms divesting their asset management businesses to investment management firms in such a favorable market environment. In the same vein, one would expect discount brokers to roll in dough under such favorable market conditions. Financial reports from discount brokers like Charles Schwab (SCHW), TD Ameritrade (AMTD), and E*Trade Financial (ETFC) however portray a different story.