Does Morgan Stanley Have Upside Potential?

E = Equity to Debt Ratio Is Weak      

The debt-to-equity ratio for Morgan Stanley is considerably weaker than the industry average of 2.80.

Debt-To-Equity

Cash

Long-Term Debt

MS

5.77

$601.59 Billion

$402.14 Billion

GS

6.31

$807.58 Billion

$480.98 Billion

JPM

2.80

$919.04 Billion

$704.98 Billion

 

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T = Technicals on the Stock Chart Are Subpar  

Morgan Stanley is unique in that it is one of the few stocks throughout the broader market that has violently changed course many times over the past several years. Most stocks have performed very well during this bull market era. Others have failed due to dying industries. Morgan Stanley has been somewhere in the middle, managing to please and frustrate investors every few months or so. Some people might point to the 0.90 percent yield as a selling point, but it would be easy to find a better yield. For example, JPMorgan has outperformed Morgan Stanley over a three-year time frame, and it currently yields 3.20 percent. Of course, JPMorgan has its own issues at the moment, but this is just one example.

1 Month

Year-To-Date

1 Year

3 Year

MS

-7.29%

11.91%

17.14%

-29.03%

GS

-6.90%

12.03%

22.74%

-17.54%

JPM

-4.05%

10.31%

11.11%

11.81%

 

At $21.33, Morgan Stanley is trading below its 50-day SMA, but above its 100-day SMA and 200-day SMA.

50-Day   SMA

22.76

100-Day   SMA

20.56

200-Day   SMA

18.05

 

E = Earnings Have Been Inconsistent                    

Once again, there is inconsistency. This isn’t just in regards to earnings, but revenue as well.

2008

2009

2010

2011

2012

Revenue   ($)in   billions

58.40

29.97

37.64

39.14

32.04

Diluted   EPS ($)

1.39

-0.77

2.63

1.23

-0.02

 

When we look at the last quarter on a year-over-year basis, we see significant improvements in revenue and earnings.

12/2011

3/2012

6/2012

9/2012

12/2012

Revenue   ($)in   billions

7.06

8.54

8.44

6.83

8.24

Diluted   EPS ($)

-0.04

-0.06

0.29

-0.55

0.30

 

Now let’s take a look at the next page for the Trends and Conclusion. Is this stock an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY?

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