How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Morgan Stanley (
MS Quick Quote MS - Free Report) ten years ago? It may not have been easy to hold on to MS for all that time, but if you did, how much would your investment be worth today? Morgan Stanley's Business In-Depth
With that in mind, let's take a look at Morgan Stanley's main business drivers.
Founded in 1935 and incorporated under the laws of the State of Delaware in 1981, Morgan Stanley is the leading financial services holding company headquartered in New York. With 71,826 employees, the company serves a diversified group of clients and customers — including corporations, governments, financial institutions and individuals — through more than 1,200 offices across 41 countries.
The company’s businesses are divided into three segments:
The Institutional Securities ("IS") segment (54% of net revenues in 2020) includes capital raising; financial advisory services that include advices on mergers and acquisitions (M&As), restructurings, real estate and project finance; corporate lending; sales, trading, financing and market-making activities in equity and fixed income securities and related products, including foreign exchange and commodities; benchmark indices and risk management analytics; and investment activities.
The Wealth Management ("WM") segment (39%) provides brokerage and investment advisory services covering various investment alternatives; financial and wealth planning services; annuity and other insurance products; credit and other lending products; cash management services; retirement services; and trust and fiduciary services and engages in fixed income principal trading. The Investment Management ("IM") segment (7%) provides global asset management products and services in equity, fixed income, alternative investments that include hedge funds and funds of funds, and merchant banking including real estate, private equity and infrastructure, to institutional and retail clients through proprietary and third-party distribution channels. The segment also engages in investment.
In 2019, Morgan Stanley acquired Canada-based Solium Capital Inc. and renamed it as Shareworks by Morgan Stanley. In 2020, the company acquired E*Trade Financial. In March 2021, it acquired Eaton Vance.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Morgan Stanley, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $4,250.46, or a gain of 325.05%, as of July 21, 2021, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 226.06% and the price of gold went up 9.40% over the same time frame.
Looking ahead, analysts are expecting more upside for MS.
Morgan Stanley's shares have outperformed the industry so far this year. Its earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters. Its second-quarter 2021 results reflect the impacts of solid advisory business, rise in interest income and dismal trading performance. The company has been making efforts to focus less on capital markets driven revenue sources, and the acquisitions of Eaton Vance and E*Trade Financial are a step in this direction. Increasing focus on corporate lending will likely continue supporting financials. Further, the company’s robust capital deployments reflect solid liquidity position. However, elevated expenses due to its investments in franchise are likely to hurt the bottom line. Lower rates and its significant dependence on capital-markets driven revenues make us apprehensive.
Shares have gained 7.72% over the past four weeks and there have been 6 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.