FYI- ET (from insider score)

Jun-15 ET 95 E Trade Financial Corp Mitchell H. Caplan (CEO) 2.8 50.0K 19.13 956.5K 1.5M 4
Multiple Insiders Buying: After shares of E*TRADE FINANCIAL (ET) fell to their lowest levels in seven months, the online brokerage firm's top two executives stepped up and collectively took down more than $1M in stock.

On June 14th, CEO Mitchell Caplan bought 50K shares at $19.13, and President & COO Jarrett Lilien purchased 10K shares at $19.00. The buys marked the the first open market stock purchase for any ET insider since January 2005, and the first open market buys in at least three years for both executives.

Caplan, who joined the company after its acquisition of Telebank (now E*TRADE Bank) in early 2000 and also serves on its board, was named CEO of ET in January 2003. As a result of his purchase, Caplan now owns 1.461M shares of ET, though the company's April Proxy statement disclosed that his actual holdings, options and unvested restricted share grants (combined with the recent stock purchase) give the executive a 4.6M-share, or 1.1%, stake. Last year, Caplan was paid a base salary of $750K, a bonus of $3.55M, and other compensation of $146K, and awarded approximately 715K shares of restricted stock.

Lilien, meanwhile, joined ET in 1999 after the company acquired TIR Holdings, which he served as CEO of. Lilien was the chief brokerage officer & president of ET's Securities unit before being named president & COO of the company in March 2003. Lilien owns 847.3K shares of ET, though options and unvested restricted stock grants up his total holdings to 2.92M shares. In 2005, Lilien was paid a salary of $650K, bonus of $3.25M and other compensation of $78K, and he was awarded 551.5K restricted shares.

Shares of ET slid -6.5% yesterday, falling as low as $18.81 and under the $20 mark for the first time mid-December 2005, after the company said that daily average revenue trades ("DARTs") fell -3% sequentially in May and that retail client assets declined -5% to $184.2B. ET also said that gross new accounts totaled 95.3K, down from 97.8K in April, as the company ended May with about 4.39M active accounts. Margin debt balances, meanwhile, rose 2% sequentially to $7.1B, while average margin debt balances also moved up 2% to $7B.

Despite what the market viewed as negative news, the company was upbeat.

"We are very pleased with our results as we continue to execute against our long-term strategic and financial growth plan. Through the combination of organic and acquired growth, we continue to strengthen the franchise, delivering a 92% year-over-year increase in client assets, a 231% increase in end-of-period margin debt and a 126% increase in DART activity," said Lilien. "Reflected in these results is our renewed commitment and increased investment in service and the overall customer experience. We are already seeing returns on this investment as evidenced by the better than modeled economic driver attrition for Harrisdirect and BrownCo. Both integrations are now successfully completed and economic attrition currently stands at 9% and 4% respectively."

Adding further fuel to the selling pressure at ET yesterday, rival Charles Schwab (SCHW) said it is reducing and simplifying its trading fees beginning on July 1st. The market took the news as a signal that pricing in the online brokerage space could further erode, choking revenue growth.

In the wake of ET's announcement yesterday, analysts at Sandler O'Neill defended the company, saying that lower than expected DARTs are being offset by improved attrition, which could result in some upside for the company's full-year earnings. This morning, the firm commented on the insider buying, saying that "one might deduce that near-term earnings are less at risk than the stock price decline yesterday and 15% week-to-date decline might imply." The Sandler O'Neill analysts further said that they think "the steep decline in the stock price has made ET look cheap," noting that it currently trades at 10.8X their 2007 EPS estimate of $1.80, or 11.4X the $1.70 EPS consensus.