Relentless Buldge Bracket defender Dick Bove of Rochedale Securities spoke passionately about Bank of America (BAC) and Morgan Stanley (MS) in two research notes this morning.
Bove believes his dream of having outgoing BAC CEO Ken Lewis could actually be possible. After talking with investors, Bove concludes, “owners of this company (and this is not the government) want Mr. Lewis back.”
Bove argues the controversy surrounding Lewis and the bank’s purchase of Merrill Lynch last fall is seeming more and more like the witchhunt that it was, and that even Merrill sales force is happy with B of A in its current form, which he finds surprising and supportive of Lewis.
As for Morgan Stanley, Lewis says two concerns weighing on the stock are “sound and fury signifying nothing.”
Investors are worried that because MS moved from a November-ending to a December-ending financial year, the seasonally weak December will weigh on Q4 results. Big deal: it doesn’t affect the actual operations of MS, writes Bove.
The other concern is the bank’s announcement today it will sell British commercial real estate developer Crescent Properties to Barclay’s in return for forgiveness of a $2 billion loan. Again, Bove thinks this is short-sited. MS has already written down $1 billion of Crescent and so the ultimate loss on the asset may not be as much as some people are supposing. Besides, if Morgan is getting more aggressive about shedding losing assets, that’s a good thing.
Morgan Stanley shares are down 8 cents, a quarter of a percent, at $32.23 while BAC is up 3 cents at $16.11.
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