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Dick Bove Bullish On Cash-Rich Morgan Stanley
05 Apr 2012 EDT -
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Between the stock market’s assessment of Morgan Stanley and Moody’s possible downgrade, the smart money is listening to the former, noted bank analyst Dick Bove said Thursday.

Now his top pick among financials, Morgan Stanley is facing a downgrade — although by how many notches remains to be seen — but Bove isn’t worried.

“I think Moody’s is a lagging indicator here,” he said on CNBC’s “ Fast Money .”

One of the catalysts for the bank, whose stock closed down 1.6 percent at $18.38, it its impending acquisition of the remainder of Smith Barney.

The merger would benefit Morgan Stanley, which has about $70 billion in cash, Bove said.

“I can’t see them paying more than $10 billion for Smith Barney,” he said. “I don’t think it’ll create any stress on their balance sheet.”

(At the beginning of the interview, Bove provided a quiz question: Who gets paid more — The New York Yankees infield, or the CEOs of the four larger banks. See related video for the answer.)

The Rochdale Securities analyst also said he was a “big believer” in the Bank of America story.

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