MS Investment Analysis Report & Stock Research, Morgan Stanley

Morgan Stanley (MS)

MS Stock Report

2-Year Price History

View Larger MS Chart
NYSE:MS
$27.10
(2/9 2:38PM)
+1.9%
Open$26.86 Mkt Cap$36.2 Billion
High$27.2 52Wk High$35.78
Low$26.59 52Wk Low$16.12
Volume13.2 Million Avg Vol 10D22.9 Million

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MS Revenue

As a value investing shop, we are interested in seeing how MS's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.16x and the low end of the range at 0.59x.

With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for MS of 1.23x is well above its historical average. This means that MS looks relatively expensive compared to its historical Price to Sales average, and thus it is more difficult to believe that there is significant price appreciation potential. In order for the stock to become more attractive, we would like to see a decline in the Price to Sales ratio of 40% just to return MS to its historical average.

MS Cash Earnings

MS is not forecasted to produce positive Cash Earnings this year, based on recent performance. This is not a positive situation, as we would always prefer that a company is producing cash every year. However, it is important to recognize that not all companies or types of companies have the goal of producing positive Cash Earnings either early in their business cycle or following significant turnaround changes. When looking at MS, we hesitate to be overly negative on the company, but it is of concern that the company is not profitable at this time. Let's face it, companies cannot remain unprofitable for very long before a change has to be made. This could mean further restructuring or corporate event such as selling assets or spinning off divisions, at any rate a company with negative cash flows is not one that often makes a great investment unless you can acquire it at an extremely depressed price.

MS Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for MS to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for MS is $0.20 producing a current dividend yield of 0.73%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from MS against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from MS over previous years was 16.19% while the lowest dividend yield was 0.56%. It is never a good sign for a company to pay significantly lower dividends, in this case 91.28% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.

Peer Comparison

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Morgan Stanley Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including MS) 27.16 9.06 » 96.67 5.00 1.78 » 9.53 13.11% 23.46%
*10 year range does not include current year values
American Express Company AXP $43.7 Billion $36.79 27.23 6.99 » 50.90 1.68 0.32 » 2.94 4.30% 30.36%
Morgan Stanley MS $36.2 Billion $26.60 -1.00 4.39 » 36.44 1.23 0.11 » 1.87 12.25% 14.10%
Franklin Resources, Inc. BEN $22.0 Billion $96.30 25.06 9.50 » 26.68 4.67 1.99 » 5.58 3.90% 19.22%
The Charles Schwab Corp. SCHW $20.6 Billion $17.72 22.59 8.37 » 310.93 4.69 1.96 » 8.71 4.50% 28.32%
CME Group, Inc. CME $18.6 Billion $280.28 19.50 7.78 » 47.81 7.14 2.59 » 21.70 37.24% 18.08%
T. Rowe Price Group, Inc. TROW $12.5 Billion $48.13 41.42 12.67 » 47.02 6.83 2.02 » 8.72 15.63% 21.34%
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The Latest Financial News
The most recent Stocks on Financial TV & Blogs from impactful financial news sources
Fox Business

More News Than Normal on MS from Fox Business

Something important is going on with MS today, as it is getting a lot of attention on business television and influential blogs.

At the current price, value investors will want to look elsewhere for a buying opportunity as this stock has heated up and is currently Overvalued. While bearish sentiment on a stock is not always a bad thing, it is something you need to be aware of. The Motley Fool survey of crowd sentiment shows that many investors believe this stock will underperform. We noticed recently that in comparison to all other stocks we analyze in the news; MS has received less coverage from the financial media in business television and blogs.

“… Big names like caterpillar after it got a MORGAN STANLEY upgrade. Coca-cola reporting profits up 55%. Alcoa, part of a commodity play as we're seeing riskier trade on the ... …”

Squawk On The Street

MS Having an Active Day in News, Now on Squawk On The Street

MS has been one of the most active stocks in the news today, so investors in it will want to pay attention to what is happening.

The crowd at The Motley Fool does not like MS and believes that it will Underperform. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, MS has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Morgan Stanley at the current price level because according to our methodology it is not supported by the fundamentals.

“… Caterpillar raised to overweight at MORGAN STANLEY. The stock is up about 10 bucks from the $64 high on january 11th. Harman international, talked about it yesterday said it ... …”

Squawk On The Street

More News Than Normal on MS from Squawk On The Street

We are observing a lot of attention being paid to MS in the news, so if you hold the stock you may want to take a look at what is going on.

The crowd at The Motley Fool does not like MS and believes that it will Underperform. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, MS has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Morgan Stanley at the current price level because according to our methodology it is not supported by the fundamentals.

“… MORGAN STANLEY is up, as well. European banks are all having their best day in over a month at this point. We had generally good reports from ubs, although clients are still ... …”

Zero Hedge

Be Aware There is a Lot of News Today On MS and This Instance Comes from Zero Hedge

Something important is going on with MS today, as it is getting a lot of attention on business television and influential blogs.

The crowd at The Motley Fool does not like MS and believes that it will Underperform. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, MS has been less covered in the news compared to the rest of our universe of stocks. At Ockham, we are not advising buying Morgan Stanley at the current price level because according to our methodology it is not supported by the fundamentals.

“… Already suffer from investment banks in late 2008 when institutions like Merrill Lynch and MORGAN STANLEY saw their CDS exceeded the benchmark of 2,000 points. …”

The Opening Bell on Fox Business

There is Significant News on MS:Among the Twenty Most Active Stocks in the News

MS has been one of the most active stocks in the news today, so investors in it will want to pay attention to what is happening.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what The Opening Bell on Fox Business said about MORGAN STANLEY

Learn About RazorWire?
Squawk On The Street

Delevoping Economies and Where MS Fits In on Squawk On The Street

Morgan Stanley and an emerging market growth strategy were discussed recently on MS.

Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Morgan Stanley underperforming. As of this week's report, we have an Overvalued valuation on MS because the price has gotten too high to be justified by the fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Morgan Stanley has actually sunk a bit in comparison to the others.

“… billion. That's a significant part of that company. MORGAN STANLEY is number two, $1.8 billion. And bahli, a brazilian miner. …”

Squawk Box

There is Significant News on MS:Among the Twenty Most Active Stocks in the News

Something important is going on with MS today, as it is getting a lot of attention on business television and influential blogs.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Squawk Box said about MORGAN STANLEY

Learn About RazorWire?
5:47P, Feb. 08,2010 MS $26.65 Morgan Stanley
Fast Money

Valuation and Morgan Stanley Mentioned on Fast Money

Fast Money mentions some valuation metrics in regards to MS; have a read at what they think from Ockham's RazorWire.

When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Morgan Stanley has actually sunk a bit in comparison to the others. Interestingly, overall sentiment looks bearish according to the Motley Fool's CAPS survey, as most of their users see Morgan Stanley underperforming. As of this week's report, we have an Overvalued valuation on MS because the price has gotten too high to be justified by the fundamentals.

“… Second biggest was MORGAN STANLEY. And that's probably -- goes back to their purchase of 9% of MORGAN STANLEY in december of 2007 when they actually paid valuation of . > > …”

4:03P, Feb. 08,2010 MS $26.98 Morgan Stanley
Closing Bell

Stocks in the News: Morgan Stanley Among the Twenty Most Discussed Stocks

Something important is going on with MS today, as it is getting a lot of attention on business television and influential blogs.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Closing Bell said about MORGAN STANLEY

Learn About RazorWire?
4:02P, Feb. 08,2010 MS $26.60 Morgan Stanley
Closing Bell

More News Than Normal on MS from Closing Bell

We are observing a lot of attention being paid to MS in the news, so if you hold the stock you may want to take a look at what is going on.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Closing Bell said about MORGAN STANLEY

Learn About RazorWire?
View All Morgan Stanley Stock News

Key Fundamentals

MS - Morgan Stanley Fundamentals
Price (2/9 2:38PM) $27.10
Volume (2/9 2:38PM) 13.2 Million
Last Close Price $26.60
10 Day Average Volume 22.9 Million
13 Week Price Range $26.15 - $34.55
52 Week Price Range $16.12 - $35.78
LTM Revenue $30.1 Billion
 
Shares Outstanding (12/2009) 1.4 Billion
Market Capitalization $36.2 Billion
Shares Held By Institutions 1.0 Billion
Institutional Holders 1,051
% Shares Held By Institutions 75.50%
Earnings Per Share (EPS) $0.00
P/E Ratio n/a
Book Value Per Share $27.03
 
Gross Margin n/a%
Annual Dividend 0.20
Dividend Yield 0.80%
Beta 1.30
Fiscal Year Ends December

About Morgan Stanley

Morgan Stanley is considered to operate in the Financial sector. They specifically operate in the Diversified Investments business segment contained within the Financial Services industry.

A financial services company, which through its subsidiaries and affiliates, provides its products and services to a group of clients and customers, including corporations, governments, financial institutions and individuals.