BGC Partners Shares Popped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of financial intermediary BGC Partners (Nasdaq: BGCP  ) rose 10% today following an interview its CEO, Howard Lutnick, conducted on CNBC's "Mad Money with Jim Cramer" last night.

So what: The company, which helps facilitate the trading of bonds and stocks, has seen strength in its business due to higher trading volumes. Instability and higher volatility in Europe, and the U.S. government printing more bonds, are the primary reasons CEO Lutnick sees continued growth for BGC.

Now what: Today's move higher is more or less the same as analysts coming out and upgrading the stock. BGC doesn't get a lot of exposure, but it does have a monstrous yield north of 9%. The big question last night was whether the yield was sustainable, and the short answer from Mr. Lutnick was yes. This is especially important since BGC's employees own 37% of all outstanding shares and they rely on that dividend income. Since BGC owns no physical product but merely services transactions, I also feel the dividend is sustainable and I think you can expect an above average dividend payout for many years to come.

Craving more input? Start by adding BGC Partners to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On March 04, 2012, at 10:50 AM, ParisHgtsBruce wrote:

    Your missing real estate in the analysis. They added real estate with Newmark Knight Frank and are in the play for Grubb & Ellis. Where is the company going and what is going to become. Real estate and brokerage are not going to be what they once were [nor should they be] but long term are these good things or not...whats the plan here. A pop after favorable talk with Cramer is expected but what is the company becoming and what is the dividend going to be as it get there.

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