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Monday, March 19, 2012


I have been actively trading BGCP for some time now.  Like many financials it was very overbought, but with a thesis that the financial markets are firming up, Friday's decline got me very interested in the name again.

I was hoping to enter a full position near 7.20 or near the 20SMA, however an intra day reversal made me enter a position this morning. (I do not plan on selling the current position until the below target is seen.)

With the financial markets firming up, BGCP is simply too inexpensive here.  A history of its dividend yield suggests, under relatively calm financial markets, its dividend should be yielding around 6-7%. (chart courtesy of wolframalpha.)

If the pattern holds up, and I do not know why it should not barring a financial shock, BGCP should appreciate to $10-11.  (BGCP currently has a $0.68 dividend. With a target of a 6-7% yield, the stock should trade at 9.7-11.33.)

If further consolidation is seen from current levels, I am prepared to add.

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