This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Under the Radar: 3 Financial Stocks to Watch

Boutique is the new bulge: Broadpoint Gleacher Securities Group (BPSG) blends a boutique investment bank with a securities trading firm. The company formed earlier this year when Broadpoint bought Gleacher Partners, an advisory firm founded by mergers-and-acquisitions legend Eric Gleacher in 1990. The new entity generated a huge quarterly profit.

Second-quarter revenue surged 178% to $92.7 million, helped by demand for debt trading and restructuring advice. Broadpoint is expanding its presence in sales and trading, capitalizing on the void left by Lehman Brothers and Bear Stearns.

Its quarterly operating margin climbed from 5% to 24% and the net margin rose from negative territory to 16%. Broadpoint has a conservative capital structure relative to peers, with a debt-to-equity ratio of 0.2. In contrast, JPMorgan, Goldman Sachs and Morgan Stanley (MS - Get Report) all have debt-to-equity ratios over 1.

Broadpoint's Descap group is now one of Wall Street's largest players in mortgage-backed securities, collateralized loan obligations and collateralized debt obligations. These so-called toxic assets have become a public relations nightmare for banks mired in the Troubled Asset Relief Program, allowing Broadpoint to scoop up business.

Second-quarter Descap revenue more than tripled to $38 million. Revenue from its debt capital markets unit climbed 159% to $36 million. Broadpoint's expanded slate of services should help the company grow, boosting its shares.

Even though Broadpoint's shares aren't cheap at a price-to-earnings ratio of 25, it's the best bet among boutique investment banks. Small-cap competitors like Cowen Group (COWN), Greenhill (GHL), Jefferies Group (JEF) and Piper Jaffray (PJC) offer inferior investments.

Trading opportunities: Knight Capital Group (NITE) specializes in trading over-the-counter securities and pink sheets. Its focus on low-priced stocks puts it in a potentially profitable position. As institutional money comes off the sidelines, investors will target stocks they consider cheap. Over-the-counter stocks, or OTCs, have limited research coverage, which will help them attract capital.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JEF $0.00 0.00%
GS $147.23 -0.69%
JPM $55.52 -1.21%
NLY $9.75 -0.20%
MS $22.70 -1.00%


Chart of I:DJI
DOW 15,914.74 -99.64 -0.62%
S&P 500 1,851.86 -0.35 -0.02%
NASDAQ 4,283.5920 +14.8290 0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs