With interest-rate anxiety making investors jittery, online brokers were are among the hardest-hit stocks on Monday. One of the more vicious sell offs occurred with the stock of TD Waterhouse (Nasdaq: TWE), which fell 2-13/16 to 18-1/4, a decline of more than 13 percent. Investors obviously weren’t happy that Waterhouse COO Frank Petrilli left to join E*Trade on Monday.
Waterhouse, which is profitable, is trading at a discount to competitors like Ameritrade and E*Trade, but logic often doesn’t apply to Internet stocks. Last Monday, CS First Boston initiated coverage of Waterhouse with a strong buy rating and a $35 strong buy rating. CS First Boston noted that Waterhouse was the “cheapest stock” among online brokers. For some reason, the stock has been in a downward spiral since then. If it looked cheap then, now it looks like it’s on the clearance rack.