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BGC Partners, Inc. Message Board

  • deanmortensen deanmortensen Jan 17, 2014 3:50 PM Flag

    BGCP is way undervalued...

    The current stock valuation prices in a lot of fear and loathing. $4.05 cash per share on the balance sheet. The company's long-term debt is counterbalanced by the contractual payouts in Nasdaq-OMX Group stock that BGC Partners will receive over the next 15 years. The debt and stock payouts roughly net out to zero. According to Yahoo Finance, the consensus earnings estimate for BGCP is 47 cents in 2013 and 56 cents in 2014 (per share). According to my valuation analysis, the stock is worth $8 today. I believe Lutnick will make accretive acquisitions for the long-term benefit of shareholders, including himself. After all, he owns almost 9 million shares of BGCP stock.

    BGCP's stock valuation is so compelling that I'm willing to "hang around" while Lutnick executes his business plan. It doesn't appear he is doing such a bad job of running the company, after selling a piece of e-Speed for the astonishing price of $1.234 billion last year! Apparently, BGCP investors are a fickle lot, and are easily bored. (Fine with me--I'll continue to accumulate shares at a sizable discount to their economic value.)

    Sentiment: Strong Buy

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    • undervalued??? since howard stole or took over, the stock is only down 85%,but he will still lead you to the promised land.

    • Had this stock on a "real estate" watch list from some time back and took a look just now and it looks like a good buy to me. I wish I had been looking back when it was in the 4s.

    • Undervalued? Yes and perhaps no! This stock was North of $40-50 fifteen years ago and hit around $2 in 2008 trading around $10 per share for five to six years for a while and then ran from the low 3 and 4 s to todays $6.... and made noise about its great bond brokerage platform.... management keeps coming up with surprises too -and now into real estate and ?.... why would you expect Mr Market to have a strong commitment or vote of confidence with such a history ????... yes I own some but am always looking over my shoulder expecting whatever...

      • 1 Reply to mjaymich61
      • mjaymich61, investors tend to ignore dividend payouts. I agree that BGCP's share price has fluctuated wildly, especially during and after the financial crisis of 2008/09. But, if you tote up the dividend payouts over the years, that has been a large part of returns for BGCP stockholders. It's still true that Nasdaq-OMX Group paid $1.234 billion for a piece of e-Speed that Lutnick sold to them last year. That tells me that "Mr. Market" and BGCP stockholders don't understand or fully appreciate the economic value of BGC Partner's franchises. After Lutnick monetized e-Speed by selling a piece of it, investors belatedly adjusted the stock price up slightly, but in my opinion the stock price is still not reflective of the economic value of the company's franchises. I think it is likely that as CEO Lutnick continues to execute his business plan, BGCP stockholders will be rewarded in the fullness of time.

        Sentiment: Strong Buy

    • Dean - you have captured my thoughts on this subject precisely. this is a very dividend-paying investment where the downside is very well protected with a modest upside. i remain a huge supporter and buyer

      Sentiment: Strong Buy

    • I forgot to mention the 12 cents quarterly dividend, which is a 7.8% annual dividend payout. How's that for a cheap stock?

      Sentiment: Strong Buy

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