Stephen Biggar, Director of Financial Institutions Research at Argus Research Company, rates Morgan Stanley (NYSE:MS) as a “buy” because of its wealth management side.
I’m generally looking for banks that have a good loan growth story and have more of a mix of lending and capital markets activities, or a mix of wealth management and capital markets activities such as in the case of Morgan Stanley, where traditionally it’s been more institutionally focused and capital-market-sensitive. But it now has a very strong wealth management piece that they’re looking to grow, and that adds some stability to the overall business mix.
Bigger says his “buy”-rated companies are strong in several areas and have a range of businesses that over time can show growth across segments and geographies.
Morgan Stanley obviously has an enormous wealth management network, with a large number of advisers in place. That’s been a reasonably stable base of business, and looking at the balance of the business, they tend to rank well in IPOs and merger and acquisition activity and some other capital-market-sensitive business lines. It’s the wealth management piece that gives them that optimal business mix that you’re looking for.
