Morgan Stanley (MS-N)

The question was on his preference of this group of wealth management companies. He owns all three for different reasons. The possible lack of regulation under the new administration has already boosted them. They are in excellent financial shape and have good dividend growth. It is not an expensive sector.

KCE ETF for capital markets was the only ETF in the US that made a new RSI high last week going into the election. Great job building M&A and trading. Very strong wealth management. Technically, a break out. Could pull back, but he thinks there's a ways to go.

Excellent company that has owned for ~10 years. Will continue ownership. Very high quality business with strong balance sheet, and ability to generate profits. Management very strong with good capital allocation skills. 

Investment banks don't get a lot of love because earnings are so cyclical. Investors will put a different multiple on cyclical earnings versus steady earnings. Phenomenal job transitioning to more of a wealth manager; gives a lot more earnings durability. Prefers it to GS. Would not add here, valuation's too rich; wait for pullback.

They just delivered a strong Q3: +56% investment banking YOY, 22% equity trading YOY with an efficient 72% expense ratio and 17.5% return on common equity, a major beat. The wealth management business is booming with $64 billion of new assets.

They report Wednesday. Bears kept tearing apart their wealth management business, but investors buy on any weakness. Pays a 3.5% dividend. Hold on.

An investment-focused name. Bit more leverage, bit more beta. Likes this space, but it's not as conservative as the money-centre banks.

Was upgraded today. It's underperformed GS and the market since 2021. Their banking fees and M&A pipeline are both strong. Higher asset prices should benefit wealth management. Net interest income should rise as the yield curve steepens. It trades at 13x forward PE and pays a 3.5% dividend yield. They can use excess capital for share buybacks.

Pays a 4% dividend and he predicts more acquisitions and IPOs, which will benefit MS' business.

Still likes it here. Wealth management side has been flattish. Achieved rebound in investment banking. Still positive longer term.

He knows the analyst and read that note--MS is ahead of its skiis. The message was not short MS, but go underweight the name.

Likes MS, expecting its capital markets activity to increase.

They just beat and bottom lines. Their capital markets business is strong, and so is their wealth management unit after buying Eaton Vance and etrade. Reasonable PE is 15x and pays a 3.54% yield. Great growth.

The one drawback is that, unlike with an RRSP, you are subject to the 15% withholding tax on dividends paid from US companies. But he wouldn't let that keep you from owning US stocks in a TFSA, as it's all about total return and US stocks have outperformed Canadian ones for quite some time. Huge lift in the USD compared to CAD over last few years, and now we have interest rates moving down here.

Well run. 48% of revenue from wealth management, 42% from institutional, 10% from investment management. Should see a lift in these big names from falling interest rates and improving equity in fixed income markets. Some of the other banks have done better over the past year, like JPM or Citi or WFC. You'll do OK with MS as interest rate conditions improve. Paying 1.7x price to book, others are cheaper. Yield is 3.5%.

He prefers the payment companies like Visa and MA. Less competition. See his Top Picks.

Huge wealth management and financial advisory businesses have been growing. These provide very high ROE and solid base for cashflow, no matter what equity markets are doing.