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Caxton Associates decreases its position in Morgan Stanley

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Mar. 9 2015, Updated 12:06 p.m. ET

Caxton’s holdings in Morgan Stanley

Caxton Associates drastically lowered its holdings in Morgan Stanley (MS) from 5,858,880 shares in 3Q14 to 553,959 shares in 4Q14, representing a massive 91% decrease. The present holdings constitute 1.66% of the fund’s 4Q14 portfolio. Morgan Stanley is part of the Financial Select Sector SPDR Fund (XLF) with a 1.88% representation.

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Morgan Stanley: An overview

Morgan Stanley is a financial services company that operates globally. Through its affiliates and subsidiaries, the company offers services and products to a large array of customers and clients, including individuals, financial institutions, governments, and corporations. Morgan Stanley operates in three segments: Asset Management, Global Wealth Management, and Institutional Securities.

Morgan Stanley’s results fail to keep up with estimates

Revenue for 4Q14 fell by 1% to $7.76 billion. Revenue totaled $8 billion, not including accounting adjustments, which came in below the estimate of $8.08 billion. Net income was $1.04 billion, translating to a per-share profit of $0.39, which was below analyst estimates. Revenue fixed-income trading fell to its lowest value since the global financial crisis.

As far as equities trading was concerned, the revenues of Morgan Stanley rose by 8.1% to $1.63 billion, compared to the $911 million that Bank of America (BAC) posted. JPMorgan Chase (JPM) posted a 4Q14 equity trading revenue of $1.1 billion, while Citigroup (C) reported equity trading revenues of $471 million for 4Q14.

Morgan Stanley to pay $2.6 billion in settlement

Morgan Stanley stated that the Department of Justice reached a settlement of $2.6 billion to resolve civil claims surrounding the company’s sale of securities backed by residential mortgages. The agreement will lead to an erosion of $1.35 per share from the company’s 2014 earnings, leading to a 46% reduction in profits.

The next part of the series will look at Caxton’s position in Anadarko Petroleum.

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