T. Rowe Price Takes Stake in Morgan Stanley

New manager John Linehan buys more than 9.8 million shares

Author's Avatar
Jan 19, 2016
Article's Main Image

Brian Rogers recently stepped down from his position of managing the T. Rowe Price Equity Income Fund. During the time that Rogers ran the fund, he gained a 10.69% return over the course of nearly 30 years. Then in November, a new sheriff came to town. John Linehan took over as the portfolio manager. Linehan received his degree in economics from Amherst College and his MBA from the Stanford Graduate School of Business.

In the fourth quarter of 2015, Linehan and the T. Rowe Price Equity Income Fund purchased 9,820,000 shares of Morgan Stanley (MS, Financial).

Morgan Stanley is also traded in Brazil, Chile, Germany, and Mexico.

02May2017182603.png

Morgan Stanley provides financial products and services to a diversified group of clients and customers, including corporations, governments, financial institutions and individuals. The company focuses on three segments: institutional securities, wealth management and asset management.

Morgan Stanley has a market cap of $50.54 billion, a P/E ratio of 16.27, an enterprise value of $168 billion and a dividend yield of 2.08.

Below is a Peter Lynch chart for Morgan Stanley.

02May2017182603.png

Morgan Stanley has a few good signs according to GuruFocus. The operating margin is in expansion, the dividend yield is close to a five-year high, the P/S ratio is close to the three-year low and the P/B ratio is close to a two-year low.

Morgan Stanley also has two warning signs that I feel are worth mentioning. The company’s cash to debt ratio is 0.33, ranking them lower than 84% of the 560 companies in the industry. The company’s per share revenue has also been declining, which is a severe warning sign for investors.

Morgan Stanley’s 10-year high in price was $72.31 back in June 2007. Since then the company's price has been losing momentum, dropping at an average of nearly 12% annually over the previous nine years.

Cheers to your investment success.