8 Reasons TD Ameritrade Looks Like a Buy at These Price Levels

| About: TD Ameritrade (AMTD)
Looks like the market will pretty much end up even as one of the most turbulent weeks in recent history comes to a close. Hopefully next week will be more stable. In the meantime, one of the stocks in the financial sector that has been badly beaten down in the recent sell-off looks enticing at the these levels.
TD Ameritrade (NASDAQ:AMTD) Holding Corporation, through its subsidiaries, provides securities brokerage services and technology-based financial services to retail investors, traders, and independent registered investment advisors (RIA) in the United States. The company’'s offerings include TD Ameritrade for self-directed retail investors; TD Ameritrade Institutional, which provides brokerage and custody services to independent RIAs and their clients; Thinkorswim, which offers a suite of trading platforms serving self-directed and institutional traders and money managers; and Investools, which provides a suite of investor education products and services for stock, option, foreign exchange, futures, mutual fund, and fixed-income investors.

(Click chart to enlarge)

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8 reasons to like AMTD at under $15 a share:
  1. TD Ameritrade is selling near the bottom of its five-year valuation range based on P/S and P/B
  2. AMTD is trading right at long-term technical support ( see chart above )
  3. A possible combination of TD Ameritrade and ETrade could provide significant cost synergies and the give the combined entity a stronger position in the online brokerage space
  4. AMTD sells at just under 14 times this year’s expected earnings and around 11 times 2012’s consensus EPS.
  5. Market volatility is spiking trade volume. TD Ameritrade processed 900K trades this Monday up from an average of 365K/day previously. This additional trade volume is not reflected in the stock price.
  6. AMTD has a strong A- rated balance sheet and yields 1.4%.
  7. The stock has sold off around 30% over the last two months and looks to be oversold at these price levels
  8. It is significantly under analysts’ price targets. Credit Suisse has a price target of $20 on AMTD. S&P has a target of $24 on TD Ameritrade as does BMO Capital and Keefe, Bruyette & Woods.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AMTD over the next 72 hours.