Morgan Stanley (MS): Are Hedge Funds Right About This Stock?

With a general bullishness amongst the heavyweights, specific money managers have jumped into Morgan Stanley (NYSE:MS) headfirst. Herring Creek Capital, managed by Steve Galbraith, initiated the biggest position in Morgan Stanley (NYSE:MS). The fund reportedly had $16.2 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $15.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Charles Davidson’s Wexford Capital, Steve Cohen’s Point72 Asset Management, and David Keidan’s Buckingham Capital Management.

Let’s now review hedge fund activity in other stocks similar to Morgan Stanley (NYSE:MS). These stocks are Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Kinder Morgan Inc (NYSE:KMI), Abbott Laboratories (NYSE:ABT), and ConocoPhillips (NYSE:COP). This group of stocks’ market values are closest to MS’s market value.

As you can see these stocks had an average of 65 hedge funds with bullish positions and the average amount invested in these stocks was $5.72 billion. That figure was $2.39 billion in MS’s case. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is the most popular stock in this table, whereas ConocoPhillips (NYSE:COP) is the least popular one with only 44 bullish hedge fund positions. Morgan Stanley (NYSE:MS) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Theoretically VRX would be a better candidate, but, given all the controversy around the company, we’d recommend further research into KMI to find out if it is a suitable candidate for a long position.