Primecap Management Co. CA Cuts Stock Position in Morgan Stanley (NYSE:MS)

Key Points

• Primecap Management Co. CA reduced its stake in Morgan Stanley by 2.5%, selling 29,450 shares and now holds 1,150,145 shares valued at approximately $134.2 million.
• Morgan Stanley has announced a $20 billion stock buyback plan, indicating the board's belief that the stock is undervalued.
• The firm recently increased its quarterly dividend from $0.93 to $1.00 per share, reflecting an annualized dividend yield of 2.8%.

Primecap Management Co. CA trimmed its holdings in shares of Morgan Stanley (NYSE:MS - Free Report) by 2.5% in the 1st quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The firm owned 1,150,145 shares of the financial services provider's stock after selling 29,450 shares during the quarter. Primecap Management Co. CA owned approximately 0.07% of Morgan Stanley worth $134,187,000 at the end of the most recent quarter.

Several other large investors also recently added to or reduced their stakes in the business. Vanguard Group Inc. grew its holdings in Morgan Stanley by 6.9% during the 1st quarter. Vanguard Group Inc. now owns 117,769,345 shares of the financial services provider's stock worth $13,740,149,000 after acquiring an additional 7,636,547 shares in the last quarter. Capital Research Global Investors grew its holdings in Morgan Stanley by 44.8% during the 4th quarter. Capital Research Global Investors now owns 21,794,873 shares of the financial services provider's stock worth $2,740,051,000 after acquiring an additional 6,744,333 shares in the last quarter. Goldman Sachs Group Inc. grew its holdings in Morgan Stanley by 21.2% during the 1st quarter. Goldman Sachs Group Inc. now owns 17,056,916 shares of the financial services provider's stock worth $1,990,030,000 after acquiring an additional 2,989,122 shares in the last quarter. GAMMA Investing LLC grew its holdings in Morgan Stanley by 12,318.0% during the 1st quarter. GAMMA Investing LLC now owns 2,750,845 shares of the financial services provider's stock worth $320,941,000 after acquiring an additional 2,728,693 shares in the last quarter. Finally, Northern Trust Corp grew its holdings in Morgan Stanley by 20.0% during the 4th quarter. Northern Trust Corp now owns 13,403,197 shares of the financial services provider's stock worth $1,685,050,000 after acquiring an additional 2,233,589 shares in the last quarter. 84.19% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

Several research analysts have issued reports on MS shares. The Goldman Sachs Group increased their target price on shares of Morgan Stanley from $121.00 to $136.00 and gave the stock a "neutral" rating in a report on Tuesday, June 10th. Citigroup restated a "neutral" rating and issued a $130.00 price target (up from $125.00) on shares of Morgan Stanley in a report on Wednesday, June 18th. Keefe, Bruyette & Woods upgraded shares of Morgan Stanley from a "market perform" rating to an "outperform" rating and raised their price target for the company from $127.00 to $160.00 in a report on Wednesday, July 9th. Erste Group Bank upgraded shares of Morgan Stanley from a "hold" rating to a "strong-buy" rating in a report on Saturday, May 24th. Finally, Wells Fargo & Company raised their price target on shares of Morgan Stanley from $120.00 to $145.00 and gave the company an "equal weight" rating in a report on Tuesday, July 8th. Nine investment analysts have rated the stock with a hold rating, five have assigned a buy rating and one has assigned a strong buy rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $138.25.

Morgan Stanley Stock Performance

Shares of Morgan Stanley stock traded up $2.31 during midday trading on Friday, hitting $143.23. The company had a trading volume of 3,942,908 shares, compared to its average volume of 5,415,230. The stock has a market cap of $228.64 billion, a price-to-earnings ratio of 16.22, a PEG ratio of 1.76 and a beta of 1.32. The company has a quick ratio of 0.78, a current ratio of 0.78 and a debt-to-equity ratio of 3.30. The company has a fifty day simple moving average of $138.24 and a 200 day simple moving average of $128.52. Morgan Stanley has a 12-month low of $93.54 and a 12-month high of $145.48.

Morgan Stanley (NYSE:MS - Get Free Report) last posted its quarterly earnings results on Wednesday, July 16th. The financial services provider reported $2.13 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.98 by $0.15. Morgan Stanley had a net margin of 13.06% and a return on equity of 15.20%. The company had revenue of $16.79 billion during the quarter, compared to analyst estimates of $16.15 billion. During the same period last year, the firm posted $1.82 EPS. Morgan Stanley's revenue for the quarter was up 11.8% compared to the same quarter last year. As a group, analysts predict that Morgan Stanley will post 8.56 earnings per share for the current fiscal year.

Morgan Stanley Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, August 15th. Shareholders of record on Thursday, July 31st will be given a dividend of $1.00 per share. The ex-dividend date of this dividend is Thursday, July 31st. This represents a $4.00 dividend on an annualized basis and a yield of 2.8%. This is a boost from Morgan Stanley's previous quarterly dividend of $0.93. Morgan Stanley's payout ratio is 45.30%.

Morgan Stanley announced that its Board of Directors has approved a stock repurchase program on Tuesday, July 1st that authorizes the company to repurchase $20.00 billion in shares. This repurchase authorization authorizes the financial services provider to buy up to 8.9% of its shares through open market purchases. Shares repurchase programs are often an indication that the company's board believes its shares are undervalued.

Insider Activity at Morgan Stanley

In other news, insider Daniel A. Simkowitz sold 29,000 shares of Morgan Stanley stock in a transaction that occurred on Thursday, July 17th. The shares were sold at an average price of $141.13, for a total transaction of $4,092,770.00. Following the completion of the transaction, the insider directly owned 399,105 shares of the company's stock, valued at $56,325,688.65. The trade was a 6.77% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Andrew M. Saperstein sold 43,566 shares of Morgan Stanley stock in a transaction that occurred on Thursday, July 17th. The shares were sold at an average price of $140.97, for a total transaction of $6,141,499.02. Following the transaction, the insider directly owned 294,250 shares of the company's stock, valued at approximately $41,480,422.50. This trade represents a 12.90% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 148,149 shares of company stock worth $20,841,628 in the last ninety days. 0.19% of the stock is owned by company insiders.

Morgan Stanley Company Profile

Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. It operates through Institutional Securities, Wealth Management, and Investment Management segments.