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Morgan Stanley (MEX:MS) Graham Number

: MXN1,363.96 (As of Mar. 2023)
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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2023-05-31), the stock price of Morgan Stanley is MXN1472.25. Morgan Stanley's graham number for the quarter that ended in Mar. 2023 was MXN1,363.96. Therefore, Morgan Stanley's Price to Graham Number ratio for today is 1.08.

The historical rank and industry rank for Morgan Stanley's Graham Number or its related term are showing as below:

MEX:MS' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.19   Med: 0.87   Max: 2.07
Current: 1.14

During the past 13 years, the highest Price to Graham Number ratio of Morgan Stanley was 2.07. The lowest was 0.19. And the median was 0.87.

MEX:MS's Price-to-Graham-Number is ranked worse than
55.62% of 489 companies
in the Capital Markets industry
Industry Median: 0.98 vs MEX:MS: 1.14

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Morgan Stanley Graham Number Historical Data

The historical data trend for Morgan Stanley's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Morgan Stanley Annual Data
Trend Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1,232.33 1,289.18 1,553.31 1,763.61 1,451.76

Morgan Stanley Quarterly Data
Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23
Graham Number Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1,685.96 1,650.15 1,584.89 1,466.33 1,363.96

Competitive Comparison

For the Capital Markets subindustry, Morgan Stanley's Graham Number, along with its competitors' market caps and Graham Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Morgan Stanley Graham Number Distribution

For the Capital Markets industry and Financial Services sector, Morgan Stanley's Graham Number distribution charts can be found below:

* The bar in red indicates where Morgan Stanley's Graham Number falls in comparison to its industry or sector. The grey bar indicates the Graham Number's extreme value range as defined by GuruFocus.



Morgan Stanley Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Morgan Stanley's Graham Number for the fiscal year that ended in Dec. 2022 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*781.248*119.9)
=1,451.76

Morgan Stanley's Graham Number for the quarter that ended in Mar. 2023 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*733.402*112.74)
=1,363.96

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Morgan Stanley  (MEX:MS) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Morgan Stanley's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Mar. 2023 )
=1472.25/1,363.96
=1.08

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Morgan Stanley Graham Number Related Terms

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Morgan Stanley (MEX:MS) Business Description

Morgan Stanley logo
Address
1585 Broadway, New York, NY, USA, 10036
Morgan Stanley is a global investment bank whose history, through its legacy firms, can be traced back to 1924. The company has institutional securities, wealth management, and investment management segments. The company had about $5 trillion of client assets as well as over 70,000 employees at the end of 2021. Approximately 50% of the company's net revenue is from its institutional securities business, with the remainder coming from wealth and investment management. The company derives about 30% of its total revenue outside the Americas.

Morgan Stanley (MEX:MS) Headlines