4-Star Stocks Poised to Pop: thinkorswim Group

Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online brokerage and financial education company thinkorswim Group (Nasdaq: SWIM) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

by Brian D. Pacampara

Published on January 3, 2009 - 1 comments

With that in mind, let's take a closer look at thinkorswim's business, and see what CAPS investors are saying about the stock right now.

thinkorswim facts

Headquarters (founded)	Chicago (1996)
Market Cap	$373.72 million
Industry	Investment brokerage
TTM Revenue	$380.12 million
Management	Chairman/CEO Lee Barba CFO Ida Kane
TTM Return on Equity	38.2%
Competitors	*ETrade Financial (Nasdaq: ETFC) Charles Schwab** (Nasdaq: SCHW)
CAPS members bullish on SWIM also bullish on	Apple (Nasdaq: AAPL) Microsoft (Nasdaq: MSFT)
CAPS members bearish on SWIM also bearish on	General Motors (NYSE: GM) Amazon.com (Nasdaq: AMZN)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 166 of the 186 members who have rated thinkorswim -- or 89% -- believe the stock will outperform the S&P 500 going forward. These bulls include danno82 and CAPS All-Star Guin3666.

Last month, Guin3666 noted that thinkorswim "is a high growth company that looks like despite the horrible current market conditions was still able to have positive earnings and grow."

In a pitch from three days ago, dann082 shares that bullishness, writing:

Thinkorswim is a great broker. They have an extremely loyal customer base which is growing at 70 percent year over year. The Daily Avg Revenue Trades (DARTS) are growing at better than 50% annually. The stock has been punished with the market and because of the Investools Education segment which does use high pressure tactics and cost shifting to sell what seems to be good training. The un-answerable question is why they need to use manipulation, pressure, and cost shifting to sell valid quality market education. Still, the growing brokerage revenue will soon make the education business irrelevant. And even if you decide against the stock you owe it to yourself to check out thinkorswim as a broker.
Copyright © 2008 Universal Press Syndicate.