Macroaxis Stories

BGC Partners decline may be deceptive

May 24, 2019  By Ellen Johnson
Macroaxis Story
This piece is geared to all BGC Partners insiders as well as to investors considering exiting their position in the corporate body. I will focus on the cause of why it is still reasonable for the corporate body to generate above average margins and lots of cash flow. Is BGC Partners valuation justified? Here I will also cover the organisation prospective on valuation to give you a better outlook on taking a position in this stock. What is BGC Partners Target Price Odds to finish over Current Price? Contingent on normal probability distribution, the odds of BGC Partners to move above current price in 30 days from now is more than 94.0%. The BGC Partners probability density function shows the probability of BGC Partners Stock to fall within a particular range of prices over 30 days . Given the investment horizon of 30 days, the stock has beta coefficient of 1.0624 . This suggests BGC Partners market returns are highly reactive to returns on the market. As the market goes up or down, BGC Partners is expected to follow. Additionally, the company has a negative alpha implying that the risk taken by holding this equity is not justified. BGC Partners is significantly underperforming S&P 500.
Published over a year ago
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Reviewed by Vlad Skutelnik

This firm currently holds 1.25B in liabilities with Debt to Equity (D/E) ratio of 138.0 indicating the company may have difficulties to generate enough cash to satisfy its financial obligations. BGC Partners dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $0.36 per share. Earning per share calculations of BGC Partners is based on official Zacks consensus of 1 analysts regarding the entity future annual earnings. Given the historical accuracy of 97.06%, the future earnings per share of the company is estimated to be 0.82 with lowest and highest values of 0.82 and 0.82 respectively. Please note that this consensus of annual earnings estimates for the stock is an estimate of EPS before non-recurring items and including employee stock options expenses.
We determine the current worth of BGC Partners using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of BGC Partners based exclusively on its fundamental and basic technical indicators. By analyzing BGC Partners's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of BGC Partners's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of BGC Partners. We calculate exposure to BGC Partners's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to BGC Partners's related companies.

BGC Partners Investment Alerts

BGC investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring BGC Partners performance across your portfolios.Please check all investment alerts for BGC

BGC Partners Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare BGC value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across BGC Partners competition to find correlations between indicators driving the intrinsic value of BGC.

Is BGC Partners valued sensibly by the market?

BGC Partners utilizes its current and long term assets almost 2.0 %, attaining $0.02 for each dollar of current and long term assets held by the firm. An expanding assets utilization signifies that the company is being more proficient with each dollar of current and long term assets it owns. Strictly speaking assets utilization of BGC Partners shows how proficient it operates for each dollar spent on its current and long term assets. BGC Partners price decrease over the last few months could raise concerns from investors as the firm closed today at a share price of 4.67 on 1698611 in volume. The company directors and management were not very successful in positioning the firm components to exploit market volatility in April. However, diversifying your holdings with BGC Partners or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.9808. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. BGC Partners defends 3.99b total asset. BGC Partners is selling for under 4.79. That is 3.01 percent up. Today lowest is 4.67. BGC Partners Return on Average Equity is very stable at the moment. Further, BGC Partners Receivables Turnover is decreasing over the last 5 years.
 2013 2018 2019 (projected)
BGC Partners Long Term Debt to Equity 0.77  1.07  0.93 
BGC Partners Interest Coverage 7.94  7.14  5.71 
Long Term Debt to EquityInterest Coverage
All things considered, our immediate buy vs. sell advice on the corporate body is Strong Hold. BGC Partners is currently undervalued with below average probability of distress for the next two years.

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Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of BGC Partners. Please refer to our Terms of Use for any information regarding our disclosure principles.

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