Back to top

Image: Bigstock

Is BGC Partners (BGCP) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is BGC Partners . BGCP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.62. This compares to its industry's average Forward P/E of 12.95. Over the last 12 months, BGCP's Forward P/E has been as high as 8.88 and as low as 3.32, with a median of 4.55.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BGCP has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.99.

Finally, investors should note that BGCP has a P/CF ratio of 13.59. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BGCP's current P/CF looks attractive when compared to its industry's average P/CF of 14.85. Within the past 12 months, BGCP's P/CF has been as high as 13.65 and as low as 4.89, with a median of 10.11.

These are only a few of the key metrics included in BGC Partners's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BGCP looks like an impressive value stock at the moment.

Published in