Morgan Stanley Results Leave Bernstein’s Hintz ‘Humiliated’

Discussion in 'Wall St. News' started by ASusilovic, Apr 22, 2009.

  1. April 22 (Bloomberg) -- Brad Hintz, a Sanford C. Bernstein & Co. analyst who has rated Morgan Stanley stock “outperform” since mid-2007, said the bank’s weaker-than-expected results left him feeling “humiliated.”

    “My guys are holding the sword so I can run on it this afternoon,” Hintz said in an interview today, adding that he’s still reviewing his earnings estimates and hasn’t changed his recommendation on the company.

    Morgan Stanley today posted a $177 million loss in the first quarter, or 57 cents a share, compared with the 8-cent average loss estimate of 19 analysts surveyed by Bloomberg. Hintz, a 59-year-old former Morgan Stanley treasurer, was the top-ranked analyst covering brokerage firms in a survey by Institutional Investor magazine last year.

    He said he was “very disappointed” that Morgan Stanley reaped $1.3 billion of fixed-income revenue in the same quarter that Goldman Sachs Group Inc. had record revenue of $6.56 billion and JPMorgan Chase & Co. had revenue of $4.9 billion, both records.

    “Why on earth would you bring down a balance sheet or reduce your leverage of 11 times in the face of what were excellent flow trading results?” he said, referring to the leverage ratio that compares total assets to shareholder equity. “If you constrain fixed-income traders, there’s nothing they can do.”

    Colm Kelleher, Morgan Stanley’s chief financial officer, said today that the trading results reflected the firm’s reduced appetite for risk. Chief Executive Officer John Mack said in the earnings statement that “we have focused on prudent stewardship of our balance sheet, capital and risk profiles.”

    Hintz said that last year’s bankruptcy of smaller rival Lehman Brothers Holdings Inc. and the subsequent drop in the stock and bonds of Morgan Stanley may have affected management’s judgment, even though the company’s shares and debt have rebounded.

    “Is this the fallout of the near-death experience that the firm went through after Lehman? Is this a management team that says ‘whoa, we’re not going to take risk, we’re going to pull back, we’re going to be very conservative’?” Hintz said. “They let a perfectly well-thrown ball just zoom right by them.”

    It´s so hard to learn a new expression : "deeeeelllleveragiiiinnnggg". Outsch ! My throat hurts. Cough. Cough.:D
  2. LEAPup


    They are after all, "Organ" Stanley. Coudn't have happened to a "nicer" group of arseholes!

    I worked for Merrill "Lynch-ya," several years ago and interviewed with "Organ" Stanley back then. Couldn't tell any difference in the two, besides ALL of us were to wear ties at all times. Why? Well, this keeps the foreskin from popping out of the shirt, and choking a dick head to death. LOL!!!!!!!:D

    Never thought I'd see a time where Lawyers are actually on better terms than Brokers, Traders, Inv. Bankers, etc., LOL!!!!!