We recently compiled a list of the 7 Best Cheap Stocks To Buy Today Under $10. In this article, we are going to take a look at where BGC Group (NASDAQ:BGC) stands against the other cheap stocks to buy under $10.
On September 30, Federal Reserve Chair Jerome Powell addressed the National Association for Business Economics (NABE) Annual Meeting in Nashville, TN, and expressed his views on the economy, highlighting both positive and negative trends. On the positive side, he noted that the economy has shown resilience and is still growing at a solid pace, with the labor market remaining strong. He also mentioned that the recent upward revisions to GDP and GDI have removed a downside risk to the economy and that the savings rate has increased, indicating that consumers have more savings on their balance sheets.
However, Powell also pointed out that the labor market has cooled, with the unemployment rate rising to 4.2% and the job finding rate decreasing. He noted that this cooling is not necessarily a bad thing, as it may be a sign of a more sustainable labor market. Additionally, he mentioned that the housing market is still a concern, with housing inflation running at around a 3% annualized pace, which is contributing to overall inflation.
In terms of monetary policy, Powell indicated that the Fed is committed to using its tools to achieve its inflation target of 2%. He noted that the Fed has made progress in reducing inflation but still has work to do. He also stated that the Fed will be monitoring the data closely and will adjust its policy stance as needed to maintain the strength of the economy.
Jamie Dimon: Fed Rate Cut Was Necessary
In an interview with CNBC on 29 September, Jamie Dimon, CEO of JPMorgan Chase, discussed the recent interest rate cut by the Federal Reserve, saying that it was a necessary move to adjust to slowing economic growth and decreasing inflation. He notes that the economy is still strong but that there are underlying concerns about inflation and geopolitics that could impact the market. In terms of geopolitics, Dimon expresses concern about the ongoing war in Ukraine and notes that it is likely to get worse. He believes that the US and its allies need to be prepared for a longer war and that more military help will be needed to support Ukraine. Dimon also touches on the topic of the US presidential election, saying that he is not endorsing any candidate at this time and is instead focusing on policy issues that can help both the world and the US.
With the Fed’s ongoing efforts to balance growth and inflation, the economy appears poised to continue its steady expansion; with that in context, let’s take a look at the 7 best cheap stocks to buy today under $10.
Our Methodology
To compile our list of the 7 best cheap stocks to buy today under $10, we used the Finviz and Yahoo stock screeners to find the largest companies with stock prices under $10. From that list, we selected companies that are trading at a forward P/E ratio of under 15, as of October 1. We then narrowed our choices to 7 stocks that were the most widely held by hedge funds. The list is sorted in ascending order of their hedge fund sentiment, as of the second quarter, which we sourced from our database.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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BGC Group (NASDAQ:BGC)
Number of Hedge Fund Investors: 33
Forward P/E Ratio as of October 1: 10.10
BGC Group (NASDAQ:BGC) is a global brokerage company that provides fixed-income, foreign exchange, energy, commodities, shipping, and equity services to some of the largest investment banks, trading firms, hedge funds, and governments. The company operates through multiple subsidiaries and has a strong presence in international markets.
On September 24, BGC Group (NASDAQ:BGC) announced the successful launch of the FMX Futures Exchange, a new exchange for trading Secured Overnight Financing Rate (SOFR) futures and U.S. treasury futures. The FMX Futures Exchange is designed to provide clients with a more efficient and cost-effective way to manage their interest rate risk, with a state-of-the-art trading system that enables fast execution of trades.
The exchange has partnered with LCH Limited, a derivatives clearing company headquartered in London, to provide clearing and settlement services. This partnership will enable clients to benefit from LCH’s extended clearing capabilities, including cross-margining of eligible U.S. interest rate futures and interest rate swaps and will result in significant capital savings for clients, as they will be able to reduce the amount of collateral required to trade. Additionally, the exchange’s global connectivity will allow clients to access liquidity from around the world, making it a more attractive platform for trading interest rate futures.
The launch of the FMX Futures Exchange is expected to have a positive impact on BGC Group’s (NASDAQ:BGC) business, with new revenue streams generated through trading fees, clearing fees, and other services. The exchange is also expected to attract new clients and increase the company’s market share in the derivatives market.
BGC Group’s (NASDAQ:BGC) stock is trading at a forward PE of 10.10, a 15.43% discount to its sector median of 11.94. Analysts expect the company to increase its earnings by 11.5% this year and have a consensus on the stock’s Buy rating, setting an average share price target at $11.50, which represents a 9.18% upside potential from its current level. As of the second quarter, BGC Group’s (NASDAQ:BGC) stock is held by 33 hedge funds, with a total stake valued at $425.43 million.
Overall BGC ranks 3rd on our list of the best cheap stocks to buy under $10. While we acknowledge the potential of BGC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BGC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.