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Morgan Stanley: Top Pick in Banking

08/08/2017 2:56 am EST


Jim Powell

Principal Analyst, Global Changes & Opportunities

I placed holds on our banks stocks while I waited for signs of a turnaround. It now appears that a new leg up for the banks is getting started, and it’s time to begin buying them again, asserts Jim Powell, editor of Global Changes & Opportunities Report.

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Although I don’t expect to see the explosive profits that came when the economic recovery got underway, I think long-term investors can expect to see doubles and better.

I think the most attractive big bank right now is Morgan Stanley (MS). Unlike its rivals, Morgan Stanley outperformed its second quarter earnings estimates in all its divisions—and set records in wealth management, one of the brightest stars in global banking today.

Although not all the bank’s businesses made gains, those that slipped did less so than expected. For example, Morgan Stanley’s fixed income trading fell 4% vs. as much as 19% at JPMorgan Chase (JPM).

Morgan Stanley’s operations mirror those of its competitors. The bank provides a variety of financial services to corporations, governments, and other banks throughout the world.


What sets Morgan Stanley apart from its rivals is the company’s management made faster, and better, changes to the bank’s operations to benefit from the new trends in financial services.

As you can see from its stock chart, Morgan Stanley took a hit from mid-2015 to early 2016 — as did most other banks. However MS recovered faster than the others and is still moving up. I think Morgan Stanley will be a good performer for long-term investors.

If you don’t yet own a major bank stock, or you wish to increase your position in the industry, I think you should consider buying Morgan Stanley.

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