We recently published a list of 14 Best Holding Company Stocks to Buy Right Now. In this article, we are going to take a look at where Morgan Stanley (NYSE:MS) stands against other best holding company stocks to buy right now.
The Treasury Yield Market
The treasury yield has been moving towards its lowest point in a month following a comment from the Treasury Secretary, Scott Besson. The secretary suggested that the new administration is focused on the 10-year treasury and its yield, rather than the Fed cutting interest rates. On February 6, Ed Mills, Managing Director at Raymond James, appeared in an interview on Yahoo Finance to discuss his outlook on the market amid new economic, political, and tax policies.
Mills reiterated a very important factor raised in the Secretary’s speech the day before, suggesting that the Trump tax cuts from 2017 were to be made permanent, adding $4 trillion to debt and deficit over the coming 10 years. He added that the policies also desire to cut tips and social security taxes, now bringing the total debt and deficit to $5 trillion. Mills suggested that the debt and deficit were so huge that it would be extremely challenging for the government to keep the “long end of the curve down.”
Why Value Investing is the Way to Go
In another interview on March 5 on Yahoo Finance, Michael Sonnenfeldt, founder and chairman at TIGER 21, shared his market thesis amid changing macroeconomic and political trends. He shared that while turmoil and confusion are encapsulating the market, his clients remain very strong, emphasizing his inclination towards value investing. He also added that his members are finding significant value in private equity and the private real estate industry.
He suggested that while a lot of indicators in the market point towards a possible rotation from growth into value, he remains cautious about the changing conditions, reiterating that it is currently very challenging to find value in the market environment. Sonnenfeldt added that focusing on the fundamentals of equities is of crucial importance at the moment, rather than company momentum, amid volatile economic and political conditions. He shed light on his member’s buying strategy, which happens to be entirely focused on the basics of a stock, emphasizing that others should follow suit.
While some stocks pose a risk due to the current market conditions, some stocks, especially those with strong fundamentals and long-standing businesses, offer greater protection and certainty.
Our Methodology
To come up with the 14 best holding company stocks to buy right now, we went over similar rankings on the internet and compiled an initial list of 20 stocks. We then examined the hedge fund sentiment around every stock and picked the most popular ones. Our list is in ascending order of the number of hedge funds, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A panoramic view of a financial institution, representing the number of corporations who trust the company’s services.
Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 64
Morgan Stanley (NYSE:MS) is an investment banking company that is also one of the best holding company stocks to buy right now. The company helps businesses, individuals, and institutions manage their wealth and achieve their financial goals. MS offers wealth management services, investment management services, investment banking, sustainable investing, and sales and trading services. Morgan Stanley’s (NYSE:MS) wealth management business is one of the fastest-growing businesses with more than 16 million clients across all its business channels.
In the fiscal year 2024, Morgan Stanley (NYSE:MS) generated net revenues worth $61.8 billion and net income worth $13.4 billion, reaffirming the company’s position in the industry. Its wealth management segment generated $28.4 billion in net revenues, reflecting the company’s performance in asset management and transactional revenues. Its investment management segment generated $5.9 billion in net revenues, which was primarily driven by asset management revenues. In an impressive feat, Morgan Stanley (NYSE:MS) saw a 25% increase in revenue in its investment banking segment, a 35% increase in its fixed income segment, and a 51% increase in its equity segment during the fourth quarter of 2024.
In addition to that, Morgan Stanley (NYSE:MS) also demonstrated a solid capital position, having repurchased $0.8 billion of its outstanding common stock during the fourth quarter and $3.3 billion for the complete fiscal year, as part of its extensive share repurchase program. Overall, MS has a large financial ecosystem with offices in 42 countries, explaining its financial performance and significance among customers.
Overall, MS ranks 12th on our list of best holding company stocks to buy right now. While we acknowledge the potential of MS as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
