Morgan Stanley: Financial Winner

NEW YORK (TheStreet) -- Morgan Stanley (MS) was the winner among the largest U.S. large bank holding companies on Thursday, with shares rising 1% to close at $14.90.

The broad indexes all showed 1% declines on very light trading volume, after the U.S. Labor Department announced that first-time jobless claims for the week ended Aug. 25 totaled a seasonally adjusted $374,000, which was unchanged from the previous week.

The KBW Bank Index (I:BKX) also declined 1% to close at 47.03, with all 24 index components showing declines, except for KeyCorp (KEY), with shares rising slightly to close at $8.40.

Shares of Citigroup (C) declined 1% to close at $29.65, after the Wall Street Journal reported that the company had agreed to pay $590 million to investors who bought the company's common stock between Feb. 26, 2007, and April 18, 2008, to settle charges that Citi had mislead investors by hiding the extent of its underwriting of subprime mortgage-backed securities.

Citigroup denies the allegations. The company in 2010 settled similar allegations with the Securities and Exchange Commission for $75 million, also without admitting fault.

The coming payout to investors seems to be a rather paltry sum, when considering that Citigroup's shares had lost nearly 94% of their value for the five-year period through Wednesday's close, according to Thomson Reuters Bank Insight. The shares underwent a 1-for-10 reverse split in May of last year, and have now returned 13% year-to-date.

Morgan Stanley's shares have now declined 1% year-to-date, following a 44% decline during 2011.

The shares trade for just under half their reported June 30 tangible book value of $31.02, and for eight times the consensus 2013 EPS estimate of $1.94. The consensus 2012 EPS estimate is 90 cents.

The company currently owns 51% of the Morgan Stanley Smith Barney joint venture, with Citigroup holding 49%. Morgan Stanley has the option to purchase the remaining stake in the joint venture over a three year period beginning in 2012, and in May announced plans to purchase an additional 14% stake, subject to a valuation that was to be determined over a 90-day period, which on Wednesday was extended until Sept. 10.

1 2 Next › Last »