Trade-Ideas LLC identified

BGC Partners

(

BGCP

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified BGC Partners as such a stock due to the following factors:

  • BGCP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.9 million.
  • BGCP has traded 159,773 shares today.
  • BGCP is trading at 2.96 times the normal volume for the stock at this time of day.
  • BGCP is trading at a new low 3.07% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on BGCP:

BGC Partners, Inc. operates as a brokerage company in the United Kingdom, the United States, Asia, France, other parts of the Americas and Europe, the Middle East, and Africa. It operates in two segments, Financial Services and Real Estate Services. The stock currently has a dividend yield of 7%. BGCP has a PE ratio of 18. Currently there is 1 analyst that rates BGC Partners a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for BGC Partners has been 1.1 million shares per day over the past 30 days. BGC has a market cap of $2.5 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.18 and a short float of 2.2% with 5.94 days to cover. Shares are down 6.9% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates BGC Partners as a

buy

. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 16.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Capital Markets industry and the overall market, BGC PARTNERS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • BGC PARTNERS INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BGC PARTNERS INC increased its bottom line by earning $0.49 versus $0.02 in the prior year. This year, the market expects an improvement in earnings ($0.85 versus $0.49).
  • After a year of stock price fluctuations, the net result is that BGCP's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.
  • The gross profit margin for BGC PARTNERS INC is currently extremely low, coming in at 8.83%. Regardless of BGCP's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BGCP's net profit margin of 2.13% is significantly lower than the industry average.

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