IBKR - Interactive Brokers: Holding With A Watchful Eye

2024-03-13 21:03:27 ET

Summary

• Interactive Brokers has been successful in delivering quality services to its sophisticated user base, offering access to a wide variety of markets and strong order execution.
• The company has capitalized on high interest rates, attracting capital to be parked in customers' brokerage accounts and generating consistent growth in net interest income and brokerage commissions.
• The company's financial position is healthy, with impressive metrics such as increased customer accounts, equity, credits, and margin loans. Valuation is attractive with a low PEG ratio, but insider selling could raise some concerns.
• Its high exposure to the economy means that I need to keep a watchful eye on this investment.

My first coverage of Interactive Brokers ( IBKR ) was over half a year ago and I felt that it is prudent to review my investment thesis given the healthy rise in its stock price against a market where "Mag 7" dominates and popular narrative would have you believe that the returns in the market are very concentrated. It could be concentrated but I have no exposure to the Mag 7 (it could be Fab 4 now) and so far I have no complaints with my investments. From what I have seen, businesses that display quality are still being rewarded, and Interactive Brokers is one such name where I see them delivering. I have the confidence that they will continue to deliver barring a deep recession risk....

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