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Bank Earnings Wrap-up: Morgan Stanley, Northern Trust, Signature Bank, More

Tech companies are doing the heavy lifting today, as the Nasdaq is the only major index that’s well in the green. Both the Dow and S&P are close to flat due to mixed earnings releases from various companies. In this financial-heavy edition of trending stocks, we analyze the earnings results of five banks: Morgan Stanley (NYSE:MS), Northern Trust Corporation (NASDAQ:NTRS), M&T Bank Corporation (NYSE:MTB), Signature Bank (NASDAQ:SBNY), and Pacific Premier Bancorp, Inc. (NASDAQ:PPBI). In addition to the results, we’ll use SEC filings to see what elite funds think of each of stock.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 765 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

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Morgan Stanley Rises 2.5% on Earnings

Traders are watching Morgan Stanley (NYSE:MS) after the investment bank reported EPS of $0.75 on revenue of $8.91 billion for the second quarter. The results beat the average analyst estimates by $0.16 per share and $610 million respectively. One reason for the beats is that fixed income trading revenue was better-than-expected at $1.30 billion, crushing analyst estimates of $1.01 billion. Wealth management sales fell by 2% year-over-year however, to $3.81 billion. Tangible book value was $31.39 per share. Of the 766 active funds that we track, 52 funds owned $1.75 billion worth of Morgan Stanley (NYSE:MS) positions on March 31, which accounted for 3.60% of the float.

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Northern Trust Reports Earnings

Northern Trust Corporation (NASDAQ:NTRS) shares are 1.3% in the red today after the company reported mostly in-line results. For the second quarter, Northern Trust earned $1.06 per share on revenue of $1.32 billion, while analysts had anticipated EPS of $1.06 and $1.31 billion in revenue. Sales rose by 4.8% year-over-year, led by a 3% rise in assets under custody. AUM fell by 4% however, to $906.2 billion. 25 funds that we track were long Northern Trust Corporation (NASDAQ:NTRS) at the end of March.

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On the next page we’ll take a look at the earnings reports of three more banks.

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