By Joe Ruff
The Associated Press
OMAHA, Neb. - Gone are the television ads featuring Stuart, a frenetic, spike-haired hipster counseling his staid boss about how to buy stocks over the Internet.
Ameritrade Holding Corp. and other online brokerages have grown from 1990s upstarts to stock market mainstays, offering research and investment tools, and not just the convenience of the Web.
"At one time it was 'You're going to use the Internet and you're going to do a trade for eight bucks,' " Ameritrade chief executive Joe Moglia said. "Today it is, 'You have financial goals that we want to help you reach.' "
Although it was hit hard when the high-tech stock bubble burst, Ameritrade is now posting record earnings, having expanded through the acquisition of Datek Online Holding Corp. and other online brokerages. It also eliminated hundreds of jobs since 2000.
In the first six months of fiscal 2004, the company had net income of $153 million, or 35 cents a share, a huge increase over last year's first half earnings of $32 million, or 7 cents a share. Over the last four quarters, Ameritrade has made more money than in its 28-year history combined.
Its stock price is in the mid-$13 range, down from its 52-week high of $17.66, but well above its 52-week low of $4.88.
Ameritrade thrives even though it does not provide investment advice. Charging $10.99 a trade, it offers free and fee-based stock market tools that include real-time stock quotes, company profiles and earnings estimates.
The company leads the industry in trades per day, averaging about 212,000 in its second quarter.
"We are really a transaction processing machine," Moglia said.
Now Ameritrade is looking to attract more money from long-term investors with fee-based financial planning tools designed to compete with mutual fund companies.
The tools, which Ameritrade calls portfolio allocation programs, will be offered starting this fall and help investors create portfolios. Questions provided on a Web site will help customers decide what mix of stocks and bonds best match their investment goals and get options based on their answers.
