They've done everything right,. but has been crushed by this inane rotation out of the financials. They trade at 12x earnings, a pittance compared to FAANGs and Nasdaq. It's so darn cheap. If shares keep falling, buy.
(A Top Pick Dec 16/20, Up 55%) Acquisitions have pushed revenues to over 50% from wealth management. Doubled dividend, so it's an income play as well. Lots of cashflow. Expects double digit growth. Still a good hold, but not as much juice now for a first-time entry.
Market outlook Stocks are so pegged to interest rates now. If rates go 1.6%-1.7%, money comes out of growth and into value. If we stay around this level, earnings hold and we see clarity in terms of rates in the next couple of quarters, we could see more money going into stocks that have earnings tailwinds like financials, like MS. But volatility spikes and rates pass 2%, money will come out of stocks in general.
BAC vs. MS He owns both. They're different banks: MS is far less sensitive to loan growth, as over 50% of revenues come from wealth management (they bought etrade and Eaton Vance). BAC is the US bank most sensitive to interest rate moves; their loan book is crucial to their growth. He likes both and both reported strongly last week. BAC has a slightly better valuation than MS, so it gets the edge.
He loves how it's transforming more into a wealth management business. They reported a top and bottom line beat yesterday. The stock has room to run, despite its recent run-up. They've made a big move into asset management, though still an investment bank. Expenses were far lower than expected. Shares rallied despite a downgrade. It trades at less than 14x 2022 earnings, which he predicts will be 20x earnings one day. A lot of room to run.
MS vs. V Likes banking in general in the US as well as in Canada, because the economy is improving and this should improve net interest margins. She owns JPM instead of MS, as they've been very well run over time, gorgeous balance sheets, diversified, doing well in capital markets. She likes Visa as well. It will benefit as payment volumes ramp up with more travel domestically and internationally. Since the pandemic, people are using their plastic cards more. Right now, between MS and V, she prefers Visa, as it's lagged the market and its long-term growth profile is more attractive.
They report Thursday. He expects amazing results. The banks have had a huge run-up, but are still behind the overall market's PE. If this gets hit week, he will buy more.
It got downgraded today by Oppenheimer. He disagrees. A boring stock can be a good stock, like MS. MS is consistently boring. The current CEO has turned this around; MS used to be a rollercoaster, rooted in bad mortgages from the Great Recession and paying a big fine for that. They bought Eaton Vance and Etrade to boost its wealth management business--smart.
(A Top Pick Aug 10/21, Up 107.1%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with MS has triggered its stop at $100. We recommend covering the remaining position at this time. Combined with the previous recommendation to cover half the position, this results in a total net investment return of 65%.
MS vs. C Likes the banking sector, US banks in general, and both these names. Citi is at its 200-day MA, pretty cheap at below book value of 0.77, a diversified bank. MS price to book is 1.9x, has done well, with more growth so you're paying up for it, more into wealth management and institutional securities.
(A Top Pick Oct 29/20, Up 113.3%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with MS is progressing well. We recommend trailing up the stop to $100 (from $85). If triggered, this would all but guarantee an net investment return of 65%, considering our recommendation to cover half the position previously.
Likes the financial sector. XLF only recently took out the highs from 2008. Wealth management has been a stellar grower. e-Trade has fuelled asset gains, strong in capital markets. Recently doubled dividend, which they'll continue to grow. Yield is 2.80%. (Analysts’ price target is $100.66)
Wealth management supplies more than 50% of revenues. Purchased e-Trade and Eaton Vance. Reported very strong earnings. Trading at 14x earnings, very attractive. CEO is a very good operator. Not exposed to loan books or interest spreads, not as sensitive to the economy. Yield is 2.74%. (Analysts’ price target is $100.66)
Morgan Stanley is a American stock, trading under the symbol MS (previously MS-N on Stockchase) on the New York Stock Exchange (MS). It is usually referred to as NYSE:MS or MS