Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a number of reasons. But they only buy stock for one reason – they expect it to rise.
In this report, we are going to highlight some interesting insider buying at Apollo Global Management Inc (APO:US). Apollo Global Management is an American financial services company that specializes in alternative investments. One of the world’s largest alternative investment managers, it manages capital for pension funds, sovereign wealth funds, university endowments, charitable foundations, financial institutions, and family offices. The company is listed on the New York Stock Exchange and currently has a market capitalization of $24.9 billion.
Apollo Global Management: Insider Buying
Our insider transaction data shows that in May, three board members at Apollo purchased stock. On 11 May, Pauline Richards bought 2,120 shares at a price of $57.16 per share, spending $121,000 on stock. Then, on 24 May, Alvin Krongard picked up 2,135 shares at a price of $57.37 per share, spending $122,000 on stock. Finally, on 25 May, lead independent director Jay Clayton bought 5,000 shares at a price of $57.39 per share, spending $287,000 on the stock. These insider buys come after 10% owner Tiger Global spent around $47 million on Apollo stock in March.
These insiders are all highly experienced in the financial services industry. Previously, Jay Clayton served as the Chairman of the US Securities and Exchange Commission (SEC). Prior to joining the SEC, he was a partner at Sullivan & Cromwell LLP, where he specialized in M&A.
Mr. Krongard was previously Vice Chairman of the Board of Bankers Trust and served in such capacity until joining the Central Intelligence Agency in 1998. Meanwhile, Ms. Richards served as CFO of Lombard Odier Darier Hentsch Limited in Bermuda, a trust company business. Given their industry experience, it’s likely that these insiders know what they are doing.
The alternative investments industry is booming right now and this is reflected in Apollo’s first-quarter results. For the quarter, the company generated management fees of $457.2 million, up from $396.6 million in the first quarter of last year. Meanwhile, distributable earnings per share were $2.31 versus $0.37 in the same period last year. On the back of these results, the company declared a quarterly dividend of $0.50, up 19% on the $0.42 payout for Q1 2020.
“The first quarter was incredibly strong for Apollo, with record GAAP earnings of $2.81 per share and record fee-related earnings of $0.65 per share, up 26% year over year,” commented CEO Marc Rowan.
Looking ahead, management was optimistic in relation to the company's prospects. “Our private equity portfolio is incredibly well-positioned for the reopening of the US economy”, said Mr. Rowan. The company noted that it has close to $50 billion in ‘dry powder,’ available for investment.
In light of these results, the confident tone from management, we see the insider buying here as bullish.