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TD Bank Strong And Solid In A Wild Sector

Dec. 26, 2019 1:31 AM ETThe Toronto-Dominion Bank (TD), TD:CA16 Comments
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  • Financial Services is going to be under a lot of pressure in the next quarters.
  • Those who do not have strong solid foundations may find themselves unable to grow like their peers.
  • TD is in a good position in a number of ways we will explain in this article.

As we have outlined in previous articles, the financial sector is going to be looked at very closely. Take a look at this case where Morgan Stanley lost $140 Million USD due to a 'rogue trader' from Yale.

Here's another where New York-based firm BCG is paying $25 Million in fines due to Forex Options Fraud.

The list goes on and on, but this article isn't about the failing financial services, business, it's about one diamond in the rough.

Some companies will rise and others will fall. It's not the type of common supply and demand we're referring to, the financial sector is going through a major paradigm shift, however you want to look at it.

We're going to explain why we like Toronto-Dominion Bank (NYSE:TD) especially ahead of competitors, such as Bank of America (BAC). Let's start with the most compelling story. The online brokerage industry has been going through a major shift. Recently, Charles Schwab and TD Ameritrade announced a $26 Billion merger that's a huge deal not only for these 2 companies but for the industry as a whole:

Charles Schwab and TD Ameritrade made it official: The companies announced plans to merge on Monday, with Schwab buying TD in an all-stock transaction that values TD at $26 billion, confirming reports from last week. TD shareholders would receive 1.0837 Schwab shares for each TD share, a 17% premium over the 30-day average price that the stocks traded at before news of the deal broke on November 20.

What's special about this match made in heaven is not only the combined assets and operations, it's the combined profit centers. Here's the point about TD. We all have been watching how stock brokerages are losing out to firms like Robinhood, that offer commission-free trading. Of course, Robinhood's 'free trading' comes with a price, in line with the economic

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Pre IPO Swap is a blog that posts content about startups, Private Equity, Pre IPO Unicorns, investing in private markets, and other topics. The blog also features useful tools like lists of updated s1 filings, and other Pre IPO related news. The blog is managed by Crediblock.com a FinTech disruptor. Learn more at www.preiposwap.com

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in TD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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