Jim Cramer Talked About These 16 Stocks

4. Morgan Stanley (NYSE:MS)

During the episode of Mad Money, Cramer talked about how bank stocks like Morgan Stanley (NYSE:MS) stock performed post-election. He commented:

“The banks, especially investment banks, these stocks had gigantic moves. Moves that would normally take weeks or even months to occur and instead they happened in a handful of hours. The banks have been pushed down for ages because the Democrats have tough, relentless regulators who love to go after the industry… The regulators have crushed their earnings power and their dividend giving and their buyback ability. That, in turn, really obliterated the price-earnings multiple of the cheapest stocks in the entire market. Now though, the banks could be unfettered, they might be able to merge again, reward investors with much higher dividends, and buyback even more stock.”

Cramer also noted that the bank stocks rose significantly after the election results came in, but he gave his approval to purchase them. He mentioned that, overall, the sector remains undervalued. He also pointed out that for the stocks to surge further, they may dip first, providing an opportunity to buy.

“More importantly, the investment banks can advise on many more mergers and there will be many more mergers because the regulators will look the other way and we’ll get more IPOs too. It’s hard to convey how much antipathy there was between bankers and the Biden administration, they were oil and water.”

Morgan Stanley (NYSE:MS) is a global financial services firm offering a broad spectrum of products and services, including capital raising, financial advisory, brokerage, and investment management. According to its third-quarter earnings call, it continues to focus on delivering value to shareholders, as evidenced by its decision to raise its quarterly dividend to $0.925. In addition, the firm repurchased $750 million of its common stock during the same period.

During the earnings call, CEO Ted Pick highlighted several key trends in the financial markets, particularly in the realm of IPOs and M&A. He noted that sponsors in the IPO market currently have approximately $1.3 trillion in “dry powder,” a term used to describe available capital waiting to be deployed. Furthermore, Pick mentioned that portfolio companies in the market, by some estimates, total between $3 trillion to $4 trillion across roughly 10,000 companies.

Morgan Stanley’s (NYSE:MS) Pick also pointed out a significant change in market behavior, emphasizing that for the first time in nearly 15 years, the rate of capital deployment in private equity is outpacing fundraising. While acknowledging that these markets have faced challenges, he expressed optimism that IPOs, particularly from larger companies, will gradually return, with the market for initial public offerings steadily regaining momentum.