After last week's earnings releases from Lehman Brothers (NYSE:LEH), Goldman Sachs (NYSE:GS), and Bear Stearns (NYSE:BSC), investors should be well prepared for less-than-stellar results from the residential mortgage-related activities at Morgan Stanley (NYSE:MS). As Ryan Fuhrmann pointed out last quarter, Morgan Stanley has been showing great results recently as it turns its business around, so this quarter could be a good chance to see whether the recovery has legs.
After the earnings are released, we'll have plenty of data to dig into. But before that happens, let's step back and take a look at what investors think about Morgan Stanley as a long-term investment. To gain this insight, I've tapped into Motley Fool CAPS, where more than 30,000 investors have joined together to offer their thoughts on more than 4,600 companies, Morgan Stanley among them. Here's what Fools have to say about the company.
Up or down?
The 378 investors who have weighed in on Morgan Stanley are collectively lukewarm on the stock.
Out of a possible five stars, Morgan Stanley managed three. Overall, 91% of players who have weighed in on the firm have been bullish on it. When it comes to the CAPS All-Stars -- those investors in the top 20% of all CAPS players -- it was given the nod 92% of the time.
Among comparable stocks, Morgan Stanley finds itself stuck in the middle on CAPS.
|
Stock |
CAPS Rating |
|---|---|
|
Goldman Sachs |
**** |
|
Bear Stearns |
*** |
|
Lehman Brothers |
*** |
|
Merrill Lynch (NYSE:MER) |
*** |
|
Morgan Stanley |
*** |
|
KBW (NYSE:KBW) |
** |
|
Cowen Group (NASDAQ:COWN) |
* |
Wall Street vs. Main Street
When we turn to those Wall Street types, we find that eight of the 20 analysts following the stock don't care to make a call one way or the other and say you should just hang on. The other 12 analysts have given Morgan Stanley the thumbs-up.
Over the past year, Mr. Market has liked what Morgan Stanley has shown, and the stock has gained 39% versus 21% for the S&P. The tepid sentiment on CAPS could call into question whether the stock has what it takes to keep heading up and to the right.
Bull pitch
CAPS player bersonperson has this to say about Morgan Stanley:
Morgan Stanley is a solid investment bank with an excellent operation in the technology sector. Its technology division is based in the heart of Silicon Valley right next door to the likes of Google, etc.
Bear pitch
Morgan Stanley bear martynanasi counters with his thoughts on the bank:
Because I have worked at Morgan Stanley for several years I do feel I have some insight into their situation. One, they are fairly heavily involved in the sub-prime market and lending to independent originators. This [in] the next several quarters will come to light and more than likely reduce earnings from having to auction off loan packages in an already depressed market. This will also hit earnings in trading as well as they tend to take large positions in some of these securities.
Who said that?
To read more from the wise Fools who penned these words, and explore the wealth of additional financial data we've put together on Morgan Stanley, just click here.
Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. The Fool's disclosure policy had a page on MySpace but became way too popular and ended up spending all of its time updating its photos.
