We recently compiled a list of the Jim Cramer is Talking About These 14 Stocks Before Earnings. In this article, we are going to take a look at where Morgan Stanley (NYSE:MS) stands against the other stocks Jim Cramer is talking about before earnings.
As earnings season kicks off, Jim Cramer of Mad Money offered insights on what investors should watch in the coming week on Wall Street. He highlighted the anticipated reports from several major banks, along with a few other companies, as key events to monitor.
Cramer expressed optimism about the current market conditions, noting that the situation aligns with his previous predictions that the market would thrive once the Federal Reserve began reducing interest rates while the economy remained strong. He remarked on the spectacular earnings reported by some major banks on Friday, emphasizing that this positive news is particularly impactful now, as opposed to previous instances when the Fed was tightening, causing good news to go largely unnoticed. Cramer believes that with the Fed now supportive of the market, there is potential for more favorable times ahead.
Looking to Monday, Cramer predicted that the focus will shift away from earnings reports due to other significant developments over the weekend. He mentioned the anticipated unveiling of a Chinese stimulus package and noted that although the rally in China has stalled, it could regain momentum if the Chinese government injects substantial funds into real estate and the stock market.
“Now, on Monday, we won’t be focused on earnings. There’s a lot of other stuff happening over the weekend. For instance, I think we’ll be parsing the Chinese stimulus package that’s going to be unveiled. The China rally is stalled, but it can get rolling again if the Chinese Communist Party keeps throwing tens of billions of dollars for the stimulus at real estate, at the stock market.”
Cramer warned that the financial sector will face a significant test on Tuesday, as different banks will be reporting their earnings. Cramer reminded investors that we are just at the beginning of one of the year’s four reporting periods, which can be chaotic and open to various interpretations.
“We’re at the beginning of one of the year’s four reporting periods,” he said. “They’re jumbled. They’re open to a lot of interpretation. They’re fast. So listen to the calls, ponder a moment, and only then should you pull the trigger.”
Our Methodology
For this article, we compiled a list of 14 stocks that are slated to release earnings this week and were discussed by Cramer during his episode of Mad Money on October 11. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
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 275% since May 2014, beating its benchmark by 150 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: 62
Cramer said that Morgan Stanley (NYSE:MS) stock was troublesome for some time but since the new CEO stepped in, buyers have been inching in.
“Morgan Stanley was a real headache for a while as the bears kept tearing apart their wealth management business. Not anymore, though. Ever since Ted Pick came in as CEO at the beginning of the year, we’ve seen buyers swarm in on any weakness. Stock’s had a big run, but you know what? It still yields 3.3%. I say hold on for the ride.”
Morgan Stanley (NYSE:MS) provides a range of financial products and services, ranging from capital raising and financial advisory to brokerage and investment management. In January, Ted Pick, a seasoned executive with over thirty years of experience at the company, succeeded James Gorman as chief executive officer. Pick has articulated a clear focus for the organization, emphasizing continuity in the strategic direction set by his predecessor. He has previously said that he seeks to uphold the bank’s established culture while striving to meet ambitious financial objectives, including a target of $10 trillion in client assets and a 20% return on equity.
On October 4, HSBC upgraded Morgan Stanley (NYSE:MS) to Buy from Hold with a price target of $118, up from $103. Analysts at HSBC suggest that the prolonged period of underperformance in the stock may be nearing its end. They cite the strength of its investment banking and wealth management divisions as factors that are likely to benefit from favorable market conditions, which should improve the firm’s financial results.
Moreover, concerns regarding net interest income have been viewed as exaggerated, especially in light of the company’s fee-based asset flows and the growth of management fees within its wealth management sector.
Overall MS ranks 13th on our list of the stocks Jim Cramer is talking about before earnings. While we acknowledge the potential of MS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
