Adam Peter and his team have been aggressively bullish rather than bearish. A report states that if Weird Al Yankovic had taken a different career path in the past and become a famous market strategist instead of a musician he would have been surely behind Morgan Stanley’s (NYSE: MS) announcement of a 12 month estimated SPX being raised to 2,125.
From Morgan Stanley’s (NYSE: MS) perspective, Megan Trainor’s song ‘All about the Bass’, “base case” seems to be pointing at the growth in earning by 7 percent in the year 2014 to 2015 and “bear case” indicates that there is not a huge possibility of flat profits in the current year with a non-impressive increase of merely 2 percent in the next.
It was not merely the title of the song that intrigued the strategists. There were also some specific lyrics that incited Weird Adam Parker and his team’s imagination.
Miniscule caps
The strategist picked up something about not worrying about the size of a company’s market capitalization. They used these lyrics ‘momma told me not to worry about my size’ to make their point that the small capital stocks are bound to be luckier than the bigger ones from now till the end of this year. This will be the result of some dreadful underperformances as the Russell 2000 Index (NYSEARCA:IWM) increased by 0.6 percent in 2014 within the last week as compared to the S&P 500’s (INDEXSP:.INX) gain by 8.6 percent. The report pointed out the main reason behind this was the possibility of a larger expansion in the profit margin in the case of numerous smaller firms.
Another part of the song’s lyrics which they seemed to have used in devising their strategy was about all the junk being in the right places, which according to Morgan Stanley’s (NYSE: MS) perception is not your portfolio for the time being. MS Morgan Stanley (NYSE: MS)’s high quality small capital stocks are: AmTrust Financial Services Inc. (NASDAQ: AFSI), Chemed Corp (NYSE:CHE), Valmont Industries Inc (NYSE:VMI) and UniFirst Corp (NYSE:UNF) and Meredith Corp (NYSE:MDP).
When you look around for the firms who are raising their forecast today you will notice that Morgan Stanley’s (NYSE: MS) firm is not alone in this. David Bianco, the strategist of the Deutsche Bank AG (NYSE:DB) has raised his end of year S&P’s 500 (INDEXSP:.INX) target from 1,850 to as much as 2,050 and for 2025 he has projected the number to go up to 2,150. This means that the Wells Fargo & Co.’s (NYSE:WFC) strategist Gina Martin Adams is alone at the bottom of the list with their forecast for 2014 to be about 1,850, which means it will have to go down by 7.7 percent as compared to the closing value of last week’s trading session.
MS (NYSE: MS) is an American company that provides multi financial services and has its headquarters built in Midtown, Manhattan, New York. Operating in about 42 countries, it has nearly 1300 offices.
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