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Michael J. Arougheti, Co-Founder, CEO, and President of Ares Management Corp (NYSE:ARES), has recently sold a significant amount of company stock, transactions filed with the Securities and Exchange Commission reveal. The sales, conducted over several days, amounted to over $8.4 million.
The series of transactions began on August 15, 2024, when Arougheti disposed of 2,235 shares at a weighted average price of $144.72, with sales prices ranging from $144.19 to $145.18. On the same day, he sold an additional 21,419 shares at an average price of $145.67, with prices varying between $145.19 and $146.19. Another batch of 3,466 shares was sold for an average of $146.26 each, with individual transactions occurring at prices from $146.19 to $146.48.
The selling continued on August 16, 2024, with 18,135 shares offloaded at an average price of $144.87 per share. The price range for these sales was between $144.14 and $145.13. Additionally, 2,976 shares were sold at a weighted average price of $145.36, with a range from $145.14 to $145.79.
On August 19, Arougheti sold 9,831 shares at an average price of $144.43, with the sales occurring at prices from $143.94 to $144.90. He also sold 392 shares at an average price of $145.38, with a price range of $144.96 to $145.48.
These stock sales were conducted under a 10b5-1 trading plan, which was adopted on December 14, 2023, by Arougheti or a vehicle controlled by him. This plan allows company insiders to set up a predetermined schedule to sell stocks at a time when they are not in possession of material non-public information.
It is also noted that Arougheti indirectly owns shares through Atticus Enterprises LLC, which is reflected in the transactions. The SEC filing indicates that following the sales, Arougheti still has a substantial number of shares indirectly held, showing continued alignment with the company's performance.
Investors and market watchers often pay close attention to insider sales as they may provide insights into executives' perspectives on the company's future performance. However, it's important to note that such transactions do not necessarily indicate a lack of confidence in the firm; they can also be part of personal financial planning or diversification strategies.
Ares Management Corp has not made any official statements regarding the transactions at the time of reporting.
In other recent news, Hyatt Hotels (NYSE:H) Corporation finalized the sale of the Hyatt Regency Orlando and an adjacent land parcel to RIDA Development Corporation and an Ares Management Real Estate fund for approximately $1.07 billion. This transaction is part of Hyatt's strategy to divest owned properties, surpassing its $2 billion asset-disposition target set in 2021. RIDA and Ares have committed to significant renovations of the hotel and plan to develop a new Grand Hyatt hotel on the adjacent 45 acres.
In parallel developments, Ares Management Corporation reported robust second-quarter performance, highlighted by significant growth in assets under management and strong fundraising results. The firm declared a third-quarter common dividend of $0.93 per share, marking a 21% increase from the previous year. TD Cowen has shown confidence in Ares Management by increasing its price target from $158.00 to $162.00, while maintaining a Buy rating on the stock.
Lastly, Ares Management plans to launch new products in the private wealth channel, particularly in infrastructure, and is considering merger and acquisition opportunities to scale up in large addressable markets. This approach aligns with the company's anticipation of solid economic growth and improvements in transaction volume. However, the firm also expects a slight increase in default rates and some structural deterioration in the upper middle market credit sector.
InvestingPro Insights
As Ares Management Corp (NYSE:ARES) navigates through the market, recent insider stock sales by CEO Michael J. Arougheti have caught the attention of investors. To provide further context to these transactions, let's delve into some key financial metrics and insights from InvestingPro.
With a market capitalization of $45.23 billion, Ares Management Corp stands as a significant player in its field. The company's current P/E ratio is a lofty 72.94, which suggests that investors are anticipating higher earnings in the future. However, when adjusted for the last twelve months as of Q2 2024, this ratio climbs even higher to 97.24, indicating an even greater expectation of growth by the market. This is supported by the fact that Ares has a track record of raising its dividend for 4 consecutive years, and has maintained consistent dividend payments for 11 consecutive years, highlighting a commitment to returning value to shareholders.
InvestingPro Tips also point out that Ares is trading at a high Price / Book multiple of 22.61. This could imply that the market values the company's assets highly, or that investors are willing to pay a premium for the company's stock. Moreover, despite recent downward revisions by 10 analysts for the company's upcoming earnings, Ares has been profitable over the last twelve months, and analysts predict it will remain profitable this year. These insights offer a mixed picture, suggesting both caution due to high valuations and optimism based on the company's profitability and dividend history.
For those looking to dive deeper, InvestingPro has a wealth of additional tips (over 10 listed for ARES) that can offer further guidance on the company's financial health and stock performance. To explore these insights, one can visit the dedicated section on InvestingPro for Ares Management Corp at https://www.investing.com/pro/ARES.
Understanding these financial nuances is crucial when assessing the implications of insider trading activity. As Arougheti's recent stock sales are analyzed, these InvestingPro metrics and tips provide a broader context for investors considering Ares Management Corp's stock.
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