Is Morgan Stanley a Good Investment?

PHOTO CREDIT: Morgan Stanley

OVERVIEW

Morgan Stanley is a multinational company based in the United States. The company is one of the worlds largest banks and financial institutions. The company offers many financial services. Some of these services include financial underwriting, risk assessments, financial advisory, and many others. The company was founded in 1924.

Why You Should?

  1. Biden ran on a moderate platform. This moderate platform without many progressive policies will benefit Morgan Stanley as they will not have to deal with massive sets of government regulation, something that is supported by some Democrats. This administration might have limited impacts on the company’s performance.
  2. Federal Reserve restrictions continue to ease on big banks. When this pandemic started, the Federal Reserve banned banks from buying back its own stock. However, in December, the Federal Reserve started to relax these and many other restrictions. This has caused the stock prices of big banks to increase. This has benefited the company and investors in the company.
  3. The banks also had to deal with low interest rates and many other negative impacts from the pandemic. Other impacts like volatile financial and commodity markets have also hurt the company. Once this is over, Morgan Stanley can continue to grow portfolios around the world. This will benefit the company and investors in the company.
  4. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has helped fuel the company’s growth and has also benefited investors in the company. This growth might slow in 2020 due to the pandemic but the company looks to return to strong revenue and profit growth in the future. In the financial year of 2019, the company reported revenues of around 41.42 billion and profits of around 9.04. Both of these metrics are higher than what the company reported in the financial year of 2018 when the company reported revenues of around 40.11 billion and profits of around 8.75 billion.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Morgan Stanley faces tough competition in the financial services industry from other large banks. Some of these competitors include J P Morgan Chase, Goldman Sachs, and many others. This competition might hurt the company and might also hurt investors in the company.
  2. The COVID-19 pandemic has hurt Morgan Stanley. The firm had to deal with many restrictions from central banks around the world, low interest rates, and lower amounts of investment money. This has hurt the company’s operations and financial numbers and has also hurt investors in the short-term.

MY OPINION

I think that Morgan Stanley is a decent long-term investment due to the moderate Biden administration, the easing of restrictions from the Federal Reserve, its position as a good reopening play, and rising revenues and profits. However, tough competition and impacts from the pandemic might hurt the company in the future.

--

--

--

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Civitas Report: From Irrelevance to Misrepresentation

Financial Irish Potato Famine

How can free trade prevent war?

Second Wave: The Market Response

Extreme Events And Their Chain Reactions

5 Things Every Investor Should Know Right Now

How the Coronavirus, COVID-19, will Impact the Australian Construction Industry

The Real Cause of Illegal Immigrants from Central America

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

More from Medium

Employee Spotlight: Richard Scioli on what makes Alloy’s sales team stand out

Journeys of an aspiring small businessman and the struggle for consistency.

How Bitcoin Works: A Simplified Guide

THE FFFL Fantasy Mock Draft V1 (And Final Version) — 3 Rounds