Morgan Stanley (MS-N)

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.

$6.6T assets under administration. Juggernaut in wealth management, which is responsible of more and more of its revenue.

Would recommend buying at 95. Hold at any stock price above. 

Likes the business, amazing execution. CEO switch, and market will test him and future plans. Huge wealth management, big into investment banking. Diverse. Not too expensive. Higher rates gives them margin expansion. As markets go up, management fees also increase. Decent dividend.

If you think markets are going up over 5-10 years, could be reasonably good long-term hold.

Continues to improve investment banking performance. Business has performed well the past 12 months. Anti-money laundering investigation not a major concern - but will watch closely. Recent earnings have been strong. Will continue to hold. 

Will benefit if indeed the capital markets business is back, as GS says. Their overhang is their wealth management business, their strongest business, which the SEC is examining. Will listen to the CEO's call about capital markets and backlog. The large banks should do well, not the regionals which look uncertain. It reports tomorrow.

Incredible business. Strong retail franchise with the brokerage business, plus very large asset management. Slimmed down risk on trading. Beat expectations. M&A should pick up next year. Multiple's not high, businesses will continue to grow. Has done a way better job than GS.

Their report was note received well and shares tumbled 4%. The past few years this has been rangebound at $80-100, now near $80. Net revenues were up 1% YOY as EPS sank 32.5% YOY. Overall, it was an unremarkable quarter and management's comments were "mixed" at best and guarded. It was downbeat. Overall, he's not thrilled with their quarter, but he's not ready to throw in the towel, because they pay a 4% yield and are buying back a lot of shares. He may add shares around $78-80. Overall, disappointing.

They report Tuesday morning. Their last quarter was badly panned because their wealth management business did not grow. Can the new CEO change this?

Made the msitake of selling this in October. Targets well over $100. Their businesses are well-diversified. Excellent execution.

Likes the money centre banks. Will do well with a normalized yield curve, as it enhances net interest margins. Fed signalling interest rates coming down should depress the short end of the curve, with the long end maintaining itself somewhat.

The group is trading at about a 30% discount to normalized valuations of around 13.5x earnings. That carries through to book value, trading at discounts to historical norms. He owns JPM, BAC, and MS, and that's where he'd put money.

He regrets selling positions in MS and BAC and wants to get back in. He does want to sell some of his JPM. Wants to return to MS and GS, because he thinks their stock-trading revenue can excel. As for Citi, their revenues are way down, so he'll pass.