Morgan StanleyMS

Morningstar Rating

Stock Research and Analysis

by Michael Wong, CPA

After the return of John Mack as CEO in 2005, Morgan Stanley put more of its own capital at risk to increase returns. This operating policy propelled the company's investment banking and principal transactions revenue to new heights during the last Read more

Bulls Say

John Mack is a well-respected financial leader known for his cost-cutting, so it can be expected that he will try to keep expenses in line with revenue.

Morgan Stanley is less leveraged and has more liquidity on its balance sheet than in recent years, so it may be able to find opportunities for profitable investments of its capital in the current turbulent environment.

There is the possibility that the markdowns on assets that the company incurred could reverse, leading to a boost in earnings.

Being one of the surviving stand-alone investment banks may allow the company to gain market share. Read more

Bears Say

Increased usage of its own capital for proprietary trading is a double-edged sword, and it could exacerbate losses during times of market stress.

Increased scrutiny of the large investment banks may lead to more restrictive legislation that could lower the company's profitability.

Off-balance-sheet guarantees and commitments may lessen the company's liquidity. Read more

Strategy

Morgan Stanley aims to maintain its position as a leading provider of investment banking services. The company commits its own capital to facilitate investment banking transactions and conducts proprietary Read more

Management

John Mack is the current CEO and chairman of Morgan Stanley. He will be retiring from his CEO position at the end of 2009, and current copresident James Gorman will succeed him as CEO. Mack joined Morgan Stanley in 1972 as a bond trader and subsequently Read more

Profile

Morgan Stanley is a global investment bank with history through its legacy firms that can be traced back to 1924. The company has institutional securities, wealth management, Read more

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Weekly Market Wrap: 1/22/2010
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