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Should Value Investors Buy BGC Partners (BGCP) Stock?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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.

BGC Partners (BGCP) is a stock many investors are watching right now. 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 4.68. This compares to its industry's average Forward P/E of 13.03. Over the past year, BGCP's Forward P/E has been as high as 7.27 and as low as 3.89, with a median of 5.09.

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Investors should also recognize that BGCP has a P/B ratio of 2.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.87. BGCP's P/B has been as high as 2.71 and as low as 1.56, with a median of 2.06, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. 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 0.81. This compares to its industry's average P/S of 2.18.

Finally, our model also underscores that BGCP has a P/CF ratio of 4.86. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 17.33. Over the past 52 weeks, BGCP's P/CF has been as high as 9.21 and as low as 3.84, with a median of 4.96.

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.

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