O’keefe Stevens Advisory, an investment advisory firm, released its first-quarter 2024 investor letter. A copy of the letter can be downloaded here. Soft-landing expectations drove the S&P 500’s 11% gain in Q1. Despite geopolitical tensions, the market is cool, however, inflation is still a concern for the firm. The top five positions accounted for almost 34% of the assets held by O’keefe Stevens Advisory. In addition, please check the fund’s top five holdings to know its best picks in 2024.
O’keefe Stevens Advisory featured stocks like BGC Group, Inc. (NASDAQ:BGC) in the first quarter 2024 investor letter. Headquartered in New York, New York, BGC Group, Inc. (NASDAQ:BGC) is a financial brokerage and technology company. On May 10, 2024, BGC Group, Inc. (NASDAQ:BGC) stock closed at $8.65 per share. One-month return of BGC Group, Inc. (NASDAQ:BGC) was 11.61%, and its shares gained 109.44% of their value over the last 52 weeks. BGC Group, Inc. (NASDAQ:BGC) has a market capitalization of $4.369 billion.
O’keefe Stevens Advisory stated the following regarding BGC Group, Inc. (NASDAQ:BGC) in its first quarter 2024 investor letter:
“During the quarter, BGC Group, Inc. (NASDAQ:BGC) announced several milestones and key elements of our thesis. First, the company provided its Q4 business update, stating it expects to be around the high end of its previous guidance range. Fenics (fully electronic business) revenues increased 20% y/y, led by Rates and Credit trading, which saw revenues rise 25% and 42.6% y/y, respectively. The market underestimates these segments’ normalized revenue and earnings power after a decade-long 0% interest rate environment. We believe these lines are just getting started in what is the normalization between treasury issuance and trading volumes.
In January, after many delays, BGC announced FMX Futures Exchange received CFTC approval and would soft launch in the summer. The exchange will compete directly with the CME, attacking their monopoly business. We detailed the key thesis on why we believe FMX can take a significant share from CME on X(Twitter), which can be found here.
The most impactful announcement was BGC’s inclusion in the S&P 600 Small Cap index, leading to the purchase of 46 million shares by price-agnostic buyers. A core tenet of the C-Corp conversion was the index inclusion opportunity. Management continues to execute its strategy with a healthy business environment and the imminent FMX launch. Despite the stock rising 11.5% in Q1 and nearly 50% over the past year, it remains undervalued. Normalized earnings power will show as Fenics becomes a more significant portion of revenue, with higher margins, lower capital intensity, and an improving business environment. We continue to hold the position and believe fair value is north of $10/share.”
A brokerage employee huddled with a group of retirees discussing retirement portfolios.
BGC Group, Inc. (NASDAQ:BGC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held BGC Group, Inc. (NASDAQ:BGC) at the end of the fourth quarter which was 33 in the previous quarter.
We previously discussed about BGC Group, Inc. (NASDAQ:BGC) in another article and shared the list of best US stocks to invest in under $10. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
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