Insider Trading : Thur 5/18/23

Notable purchases -- President/CEO adds to LAZR; notable sales -- Deputy CFO active in MS

Buyers:

• ADC President/Chief Executive Officer and the Chief Operating Officer bought a total of 6,500 shares at $65.25 - $65.50 worth ~$425K.
• ADV Chief Executive Officer bought 160,000 shares at $1.47 - $1.66 worth ~$258K.
• AFCG Chief Executive Officer / 10% owner bought 51,309 shares at $10.44 - $10.45 worth ~$536K.
• AXON Director bought 10000 shares at $199.14 - $200.25 worth ~$2.0 mln.
• INSM Director bought 20,000 shares at $19.22 - $19.35 worth ~$386K.
• LAZR Chairperson, President & CEO bought 1,475,685 shares at $5.81 - $6.33 worth ~$8.9 mln.

Sellers:

• AMC 10% owner sold 1,235,947 AMC Preferred Equity Units (APE) at $1.60 - $1.63 worth ~$2.0 mln.
• CBZ Director sold 15,000 shares at $49.73 - $50.28 worth ~$750K.
• MS Deputy Chief Financial Officer sold 7320 shares at ~$82.9505 worth ~$607K.
• ONEW Director sold 60,353 shares at $28.10 - $28.36 worth ~$1.7 mln.
• WTS 10% owner sold 7,000 shares at  $165.00 - $165.37 worth ~$1.2 mln.

-=Eaton Vance (EV) to be acquired by Morgan Stanley (MS) for $7 billion

• James Gorman’s two latest mega-deals -- the takeover of E*Trade Financial Corp., to go after millennials and other individual investors, and now the $7 billion purchase of asset manager Eaton Vance Corp., announced Thursday -- are the largest carried out by any of the big banks in Wall Street’s post-crisis reincarnation. And both were done in the span of just 10 months. 

Eaton Vance: Morgan Stanley (MS) will acquire Eaton Vance for an equity value of ~$7 billion (cash/stock of ~$56.50 per share)

Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share. Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance's common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock. The merger agreement also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism. In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources. It is anticipated that the transaction will not be taxable to Eaton Vance shareholders to the extent that they receive Morgan Stanley common stock as consideration. The transaction has been approved by the voting trust that holds all of the voting common stock of Eaton Vance.

The acquisition is subject to customary closing conditions, and is expected to close in the second quarter of 2021.

=E*TRADE (ETFC) to be acquired by Morgan Stanley (MS) for approx. $13 bln

(Reuters) - Morgan Stanley (MS) said on Thursday it would buy discount brokerage E*Trade Financial (ETFC) in an all-stock deal worth about $13 billion, the biggest deal by a Wall Street bank since the financial crisis.

The deal will help Morgan Stanley boost its wealth management unit, a business that Chief Executive Officer James Gorman has been trying to build out to insulate the bank from weak periods for trading and investment banking.

Morgan Stanley will get E*Trade's more than 5.2 million client accounts and $360 billion of retail client assets as part of the deal. The brokerage's CEO, Mike Pizzi, will continue to run the business following the merger.

"E*Trade represents an extraordinary growth opportunity for our Wealth Management business and a leap forward in our Wealth Management strategy," Gorman said.

E*Trade became popular nearly two decades ago by running commercials that blasted financial advisers for high fees.

Its revenue growth has taken a hit in recent years from the emergence of digital upstarts called roboadvisers, falling commissions and lower interest rates.

E*Trade shareholders will receive 1.0432 Morgan Stanley shares for each share as part of the deal. That translates to $58.74 per share - a premium of 30.7% to the last closing price of E*Trade shares.

Earnings season: Money Center Q2 Recap

The table below provides a recap of the Q2 earnings season for the six major money center banks. The Book Value per Share, Tangible Book Value per Share, and three month change has been updated to reflect today's prices.

2Q19 Results	MS	JPM	BAC	WFC	C	GS
RoE	12.1%	16.0%	11.6%	13.2%	10.1%	11.1%
RoTCE	13.8%	20.0%	16.2%	15.7%	11.9%	11.7%
Rev Growth (Y/Y)	-3.4%	4.0%	2.0%	0.0%	2.0%	-2.0%
Net Income Growth	-1.0%	16.0%	8.0%	-3.0%	7.0%	-6.0%
TBVPS/Price	1.09x	1.95x	1.53x	1.45x	0.96x	0.99x
BVPS/Price	0.93x	1.57x	1.15x	1.10x	1.12x	1.04x
Trading Revs (Bln)	$3.30	$6.39	$3.20	N/A	$4.67	$3.48
Equity Trading (Bln)	$2.13	$1.73	$1.10	N/A	$0.79	$2.01
Equity (Y/Y)	-14%	-12%	-13%	N/A	-9%	6%
FICC Trading (Bln)	$1.39	$3.69	$2.10	N/A	$3.32	$1.47
FICC (Y/Y)	-18%	-3%	-8%	N/A	8%	-13%
3-month Return	-3%	1%	0%	9%	-3%	-4%
Forward P/E	8.4X	10.8x	9.5x	9.5x	8.5x	9.1x
NIM	N/A	2.49%	2.44%	2.82%	2.67%	N/A
Loan Growth Y/Y	N/A	2%	4%	1%	3%	10%

=Morgan Stanley (MS) reported earnings on Thur 17 Jan 2019 (b/o)

Morgan Stanley misses by $0.09, misses on revs

• Reports Q4 (Dec) earnings of $0.80 per share, $0.09 worse than the S&P Capital IQ Consensus of $0.89; revenues fell 10.0% year/year to $8.55 bln vs the $9.32 bln S&P Capital IQ Consensus. 
• Firm net revenues were negatively impacted by the volatile global market environment.
• Institutional Securities net revenues reflect strong results in investment banking with particular strength in M&A advisory and solid results in equity sales and trading. Lower performance in fixed income sales and trading reflects the market volatility. Institutional Securities reported pre-tax income from continuing operations of $780 million compared with $1.2 billion a year ago. Net revenues for the current quarter were $3.8 billion compared with $4.5 billion a year ago. Investment Banking revenues of $1.4 billion were essentially unchanged from a year ago; sales and Trading net revenues of $2.5 billion decreased from $2.7 billion a year ago.
• Wealth Management reported pre-tax income from continuing operations of $1.0 billion compared with $1.2 billion a year ago. The quarter's pre-tax margin was 24.4%. Net revenues for the current quarter were $4.1 billion, below estimates, compared with $4.4 billion a year ago principally driven by losses related to investments associated with certain employee deferred compensation plans.
• Investment Management reported pre-tax income from continuing operations of $74 million compared with $80 million a year ago. Net revenues of $684 million increased from $637 million a year ago. Total AUM or supervision at Dec 31, 2018 were $463 billion compared with $482 billion a year ago.
• At Dec 31, 2018, book value and tangible book value per common share were $42.20 and $36.99, respectively, based on ~1.7 billion shares outstanding.

Earnings this week : Jan 14 - 18, 19 (wk 3)

Corporate profits will take center stage when fourth quarter earnings season kicks off this week.

The SEC allows companies a larger window to file their annual reports relative to quarterly updates. As a result, we will see preannouncements throughout January and fourth quarter earnings season will drag on into March.

This week, the big banks will dominant the corporate earnings newsflow.

Monday (Jan 14)    

• Morning: C SJR

Tuesday (Jan 15)

• Morning: DAL FRC INFO JPM SNV UNH WFC
• Afternoon: FULT PNFP UAL

Wednesday (Jan 16)

• Morning: BAC BLK BK CMA GS PNC SCHW USB WAFD
• Afternoon: AA CSX EGBN FUL HWC KMI PLXS

Thursday (Jan 17)

• Morning: BBT CBSH FAST HOMB IIIN KEY MS MTB MTG PPG SASR SBNY TSM WNS
• Afternoon: AXP JBHT NFLX OZK PBCT PRGS TEAM

Friday (Jan 18)

• Morning: CFG FHN KSU RF SLB STI STT VFC

-=Morgan Stanley (MS) reported earnings on Tue 17 Oct 2017 (b/o)

Morgan Stanley beats by $0.12, beats on revs -- Continued strength in investment banking and solid results in sales and trading

• Reports Q3 (Sep) earnings of $0.93 per share, $0.12 better than the Capital IQ Consensus of $0.81; revenues rose 3.2% year/year to $9.2 bln vs the $9.05 bln Capital IQ Consensus. The effective tax rate for the current quarter of 28.1% reflects the impact of a recurring-type of discrete tax benefit of $11 million related to employee share-based payments and other net discrete tax benefits of $83 million primarily resulting from the remeasurement of certain deferred taxes.
• The annualized return on average common equity was 9.6%.
  • Institutional Securities reported pre-tax income from continuing operations of $1.2 billion compared with pre-tax income of $1.4 billion a year ago. Net revenues for the current quarter were $4.4 billion compared with $4.6 billion a year ago. Investment Banking revenues of $1.3 billion increased from $1.1 billion a year ago. Sales and Trading net revenues of $2.9 billion compared with $3.2 billion a year ago.
  • Wealth Management reported pre-tax income from continuing operations of $1.1 billion compared with $901 million in the third quarter of last year. The quarter's pre-tax margin was 26.5%.2 Net revenues for the current quarter were $4.2 billion compared with $3.9 billion a year ago.
  • Investment Management reported pre-tax income from continuing operations of $131 million compared with $97 million in the third quarter of last year. Net revenues of $675 million increased from $552 million in the prior year.
• Tangible book +1.9% to $33.86/share.

=Morgan Stanley (MS) reported earnings on Wed 19 Apr 2017 (b/o)

Morgan Stanley beats by $0.10, beats on revs :

• Reports Q1 (Mar) earnings of $1.00 per share, $0.10 better than the Capital IQ Consensus of $0.90; revenues rose 25.1% year/year to $9.74 bln vs the $9.29 bln Capital IQ Consensus. 
• Compensation expense of $4.5 billion increased from $3.7 billion a year ago driven by higher revenues. Non-compensation expenses of $2.5 billion compared with $2.4 billion a year ago.
• The effective tax rate for the current quarter was 29.0%, which reflected a recurring-type of discrete tax benefit of $112 million associated with new accounting guidance related to employee share-based payments.
• The annualized return on average common equity was 10.7 percent in the current quarter.
• Institutional Securities reported pre-tax income from continuing operations of $1.7 bln compared with pre-tax income of $908 mln a year ago. Net revenues for the current quarter were $5.2 bln compared with $3.7 bln a year ago.
  • Investment Banking revenues of $1.4 bln increased from $990 mln a year ago: Advisory revenues of $496 mln decreased from $591 mln a year ago on lower levels of completed M&A activity. Equity underwriting revenues of $390 mln increased from $160 mln in the prior year quarter on higher global market volumes. Fixed income underwriting revenues of $531 mln increased from $239 mln in the prior year quarter reflecting higher bond and non-investment grade loan fees.
  • Sales and Trading net revenues of $3.5 bln increased from $2.7 bln a year ago: Equity sales and trading net revenues of $2.0 bln decreased from $2.1 bln a year ago reflecting lower results in our financing business driven by higher funding costs, partly offset by strong results in our execution services businesses. Fixed Income sales and trading net revenues of $1.7 bln increased from $873 mln a year ago reflecting strong performance across all products and regions on improved market conditions compared with the prior year period.
• Wealth Management reported pre-tax income from continuing operations of $973 mln compared with $786 mln in the first quarter of last year. The quarter's pre-tax margin was 24%.2 Net revenues for the current quarter were $4.1 bln compared with $3.7 bln a year ago.
• Investment Management reported pre-tax income from continuing operations of $103 mln compared with $44 mln in the first quarter of last year; AUM $421 mln.
• Book value $37.48/share, tangible BV $32.49/share.

=Morgan Stanley (MS) reported 4Q earnings on Tue 19 Jan 2016 (before open)

** charts before earnings **



** charts after earnings **

Morgan Stanley beats by $0.09, beats on revs :

• Reports Q4 (Dec) earnings of $0.43 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $0.34; revenues fell 0.3% year/year to $7.74 bln vs the $7.47 bln Capital IQ Consensus. 
• Institutional Securities net revenues, excluding DVA were $3.5 billion reflecting continued strength in Equity sales and trading, solid results in Investment Banking and continued weakness in Fixed Income & Commodities sales and trading.
• Wealth Management net revenues were $3.8 billion and pre-tax margin was 20%. Fee based asset flows for the quarter were $11.4 billion.
• Investment Management reported net revenues of $621 million with assets under management or supervision of $406 billion.
• At December 31, 2015, book value and tangible book value per common share were $35.24 and $30.26,20 respectively, based on ~1.9 billion shares outstanding.
• "In the fourth quarter we took action to meaningfully restructure our Fixed Income business on a capital and expense basis. We enter 2016 with a continued focus on managing expenses across the Firm and driving up returns for our shareholders."
• Peer: GS reports tomorrow morning,

Q: What's a better buy - HON or MS ?

10/10/13 (Thur), 8 days before earnings on Fri 10/18
HON : $84
MS : $27.50

 

** daily **

 

** weekly **

 

** heikin **

5 years

MS Wed-Thur, just before earnings release

Morgan Stanley turns in third-quarter earnings Friday. Given how bank earnings have fared so far this season, analysts will be looking for a few key data points: How bad was fixed-income trading? How much is the bank paying its investment bankers?

Fixed-income trading took a nose dive at other banks as clients pulled out of those markets, surprised by the Federal Reserve’s decision to keep QE in place and unnerved by the budget standoff in Washington. Both J.P. Morgan Chase & Co.  JPM -0.34% and Goldman Sachs Group Inc. GS +0.06%  cut a key measure of how they pay their  investment bankers.  Questions about fixed income trading and banker pay dominated Goldman Sachs’ analyst call on Thursday.

Analysts will also be interested in anything the bank might say about its physical commodities business. Regulators have been considering how to curb banks that own oil pipelines, metals warehouses and other physical commodities.

Morgan Stanley will be the last of the six mega-banks to report third-quarter earnings, bringing an end to a season that is perhaps best described as plodding. Most banks saw higher profits, but they were driven not by growth but by cutting costs.

** Friday 10/18/13 after earnings **

MS much better performer this week: MS gained almost 8% while HON hasn't done much.

   

JPM and WFC report earnings tomorrow Friday 10/10/13 (before market opens)

MS reports next Friday 10/18/13

*** update Friday 10/11/13 after JPM and WFC reported earnings ***