Morgan Stanley Target of Unusually Large Options Trading (NYSE:MS)

Key Points

• Traders purchased a significant 134,658 call options on Morgan Stanley, marking a 423% increase from the typical daily volume.
• The company announced a $20 billion stock buyback program and increased its quarterly dividend to $1.00, up from $0.93.
• Analysts have upgraded Morgan Stanley's rating, with a consensus price target of $138.25, as the company reported better-than-expected earnings of $2.13 EPS for the last quarter.

Morgan Stanley (NYSE:MS - Get Free Report) was the recipient of some unusual options trading activity on Wednesday. Stock investors acquired 134,658 call options on the company. Thisisanincreaseof423% compared to the typical daily volume of 25,761 call options.

Insider Transactions at Morgan Stanley

In related news, insider Michael A. Pizzi sold 18,000 shares of the firm's stock in a transaction dated Thursday, July 17th. The shares were sold at an average price of $140.62, for a total value of $2,531,160.00. Following the transaction, the insider directly owned 136,407 shares of the company's stock, valued at approximately $19,181,552.34. This trade represents a 11.66% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, insider Andrew M. Saperstein sold 43,566 shares of the firm's stock in a transaction dated 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 completion of the transaction, the insider directly owned 294,250 shares in the company, valued at $41,480,422.50. This 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 three months. 0.19% of the stock is owned by corporate insiders.

Institutional Trading of Morgan Stanley

Several institutional investors have recently added to or reduced their stakes in MS. Minot DeBlois Advisors LLC acquired a new position in shares of Morgan Stanley in the fourth quarter worth $25,000. CBIZ Investment Advisory Services LLC grew its stake in shares of Morgan Stanley by 111.0% in the first quarter. CBIZ Investment Advisory Services LLC now owns 211 shares of the financial services provider's stock worth $25,000 after acquiring an additional 111 shares in the last quarter. Princeton Global Asset Management LLC grew its stake in shares of Morgan Stanley by 645.8% in the second quarter. Princeton Global Asset Management LLC now owns 179 shares of the financial services provider's stock worth $25,000 after acquiring an additional 155 shares in the last quarter. MorganRosel Wealth Management LLC acquired a new position in shares of Morgan Stanley in the first quarter worth $27,000. Finally, Garde Capital Inc. acquired a new position in shares of Morgan Stanley in the first quarter worth $30,000. Institutional investors and hedge funds own 84.19% of the company's stock.

Morgan Stanley Trading Down 2.5%

Morgan Stanley stock traded down $3.54 during trading on Friday, hitting $138.92. The company had a trading volume of 2,971,559 shares, compared to its average volume of 6,833,475. Morgan Stanley has a 1-year low of $90.94 and a 1-year high of $145.48. The company has a current ratio of 0.78, a quick ratio of 0.78 and a debt-to-equity ratio of 3.11. The company's 50 day simple moving average is $136.61 and its 200-day simple moving average is $128.23. The stock has a market cap of $222.88 billion, a price-to-earnings ratio of 15.70, a price-to-earnings-growth ratio of 1.82 and a beta of 1.30.

Morgan Stanley (NYSE:MS - Get Free Report) last posted its earnings results on Wednesday, July 16th. The financial services provider reported $2.13 earnings per share for the quarter, beating the consensus estimate of $1.98 by $0.15. Morgan Stanley had a net margin of 13.06% and a return on equity of 15.33%. The firm had revenue of $16.79 billion during the quarter, compared to the consensus estimate of $16.15 billion. During the same quarter last year, the firm earned $1.82 EPS. The firm's revenue for the quarter was up 11.8% on a year-over-year basis. As a group, analysts expect that Morgan Stanley will post 8.56 EPS for the current fiscal year.

Morgan Stanley announced that its board has authorized a stock buyback plan 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 stock through open market purchases. Stock repurchase plans are often a sign that the company's board believes its shares are undervalued.

Morgan Stanley Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, August 15th. Investors of record on Thursday, July 31st will be issued a $1.00 dividend. This is a boost from Morgan Stanley's previous quarterly dividend of $0.93. The ex-dividend date is Thursday, July 31st. This represents a $4.00 annualized dividend and a yield of 2.9%. Morgan Stanley's payout ratio is 45.30%.

Analysts Set New Price Targets

A number of analysts have commented on MS shares. JPMorgan Chase & Co. cut their price objective on shares of Morgan Stanley from $125.00 to $122.00 and set a "neutral" rating for the company in a report on Monday, April 14th. Wells Fargo & Company increased their price objective 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. Citigroup reiterated a "neutral" rating and issued a $130.00 price objective (up previously 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 increased their price objective for the company from $127.00 to $160.00 in a report on Wednesday, July 9th. Finally, Erste Group Bank upgraded shares of Morgan Stanley from a "hold" rating to a "strong-buy" rating in a report on Saturday, May 24th. 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 MarketBeat.com, the company presently has a consensus rating of "Hold" and an average price target of $138.25.

About Morgan Stanley

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.