On Friday morning, Morgan Stanley released fourth quarter
earnings that sent the stock soaring 7.9%. Earnings per share came in at $0.45 versus
the $0.27 expected, and revenue increased by 23% to $6.97 billion, the good folks at CNBC tell us. The report and conference call were bullish
from many standpoints, and encouraged option traders to step into long
positions in the stock.
One of the biggest trades of the day was the purchase of
29,400 April 24 calls for $0.70 each, which was done with the stock at $22.30.
This is a bullish bet that MS will be above $24.70, or 11% higher, at April
expiration.
Morgan Stanley finally looks to be done cleaning house, and
can now focus on running its business as normal. CEO James Gorman has said that the dirty work
is done, meaning that the layoffs are over. He is comfortable with the company
as it now stands, with about 6,000 employees or 10% fewer than last year. The
company's profitability in the fourth quarter is not all due to cost-cutting
initiates, though – pre-tax income from the wealth management has more than
doubled since 2011, and net margins are up to 17%......
Find out more at http://www.cnbc.com/id/100398505
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