What happened
BGC Partners (BGCP) had a good week as its stock price rose 20.3% this week, as of the opening bell at 9:30 a.m. ET today, according to S&P Global Market Intelligence. The stock is trading at about $5 per share as of Friday morning, up about 35% year to date.
Overall, the markets were flat this week as the S&P 500 gained 0.3%%, the Dow Jones Industrial Average was up 0.6%, and the Nasdaq Composite was up 0.6% as of this morning at 9:30 a.m. ET.
So what
BGC Partners is a New York City-based inter-dealer brokerage firm that was spun off of Cantor Fitzgerald in 2004. The company's stock price rose this week on solid fourth-quarter earnings, released earlier this week, on Feb. 27, and signs that the positive trends were continuing in 2023.
The company topped revenue and earnings estimates, generating $437 million in revenue in the quarter, down 5.4% year over year. Adjusted earnings, excluding nonrecurring items, were $87.1 million, up 0.6% for the quarter year over year. BGC was boosted by a 7.4% increase in revenue on its FENICS electronic trading platform.
Most promising, perhaps, was a strong month of December. Brokerage revenue was up 7% for the month on higher trading volumes, compared to December 2021.
Now what
That momentum has continued into 2023, as revenue was up 8% year over year, or 10% on a constant-currency basis, through the first 35 trading days of the year. And the firm is bullish for continued growth as the aforementioned trends should lead to increased trading volume.
The firm has seen year-over-year revenue growth in all asset classes thus far in 2023, with foreign exchange surging 6%, credit rising 4%, energy and commodities jumping 15%, and equities climbing 14%.
The stock price is already up 35% year to date, and the consensus price target is $8.25 per share, which would be another 62% rise.
The price-to-earnings (P/E) ratio shot up to 39 on this run-up and the drop in net income based on generally accepted accounting principles (GAAP), but the forward P/E is just 5.9. Monitor it for another quarter of growth, but it looks promising as a potential buy.
