The Proficient Investor

The performance over the past year of onlline brokerage TD Ameritrade (AMTD) has really baffled me. In December ‘05 they announced a special dividend of $6 per share to shareholders as of January 26th, 2006. The div came and went and so did the investors. Retail began bolting from the stock immediately after the ex-div date, subsequently driving the price from $20 (After the $6 div corrected the price from $26 to $20) in a straight line to $14 in July 2006.

Since then the stock has slowly lumbered back up to $17 and change where it sits now. Even after a great earnings report, which sent the stock immediately up $1, it then dropped back down to $17. So what’s going on here?

I think Joe Investor doesn’t know how to hold his wad. Retail is seeing such small gains and then booking them immediately. Here you have a financial institution that is doing incredibly well in this soft housing market and yet nobody wants to stay in for more than a day? It’s just ridiculous. AMTD looked good when it was at $26 and is an even better buy now at $17. I’m just waiting for the analysts to get out of the picture and stop recommending this stock so the price can recover. Where are the haters when you need them?

At the time of this Publication, Mr. Wilcox was long AMTD.