David B. Kaplan, Co-Founder of Ares Management Corp (NYSE:ARES), recently sold a significant portion of his holdings in the company, according to a filing with the Securities and Exchange Commission. The transactions, executed through a prearranged 10b5-1 trading plan, occurred over three consecutive days.
On November 20, Kaplan sold 26,518 shares of Class A Common Stock at prices ranging from $169.95 to $171.65. The following day, November 21, he sold 33,284 shares at prices between $172.01 and $175.95. Finally, on November 22, he sold 18,259 shares at prices from $175.10 to $176.47.
In total, Kaplan sold 78,061 shares, generating approximately $13.6 million. Following these transactions, Kaplan retains ownership of 116,348 shares through Trently Holdings, LLC, and an additional 1,150,052 shares indirectly through Ares Owners Holdings L.P.
"In other recent news, Ares Management reported robust growth in its third-quarter earnings, showcasing an 18% increase in management fees, a 24% rise in fee-related earnings, and a 28% growth in realized income. The company also deployed nearly $30 billion globally in the quarter, contributing to a total of $74.6 billion for the year. In addition to this, Ares raised a record-breaking $21 billion in the third quarter alone.
RBC Capital Markets has revised its outlook on Ares Management, lifting the price target to $185 due to the company's resilience in fundraising. The adjustment reflects an updated perspective on the firm's financial potential within the private credit sector. Despite slightly revised down earnings per share estimates, RBC maintains an 'Outperform' rating on Ares Management's shares, acknowledging the firm's ongoing investments and resilience in fundraising.
In the face of increased compensation costs, Ares Management expects a decrease in the Fee-Related Earnings margin to around 40% in the fourth quarter. However, the company projects strong fourth-quarter performance, with anticipated fee-related performance revenues between $160 million and $170 million. Ares Management also anticipates continued growth in assets under management and performance income in 2025 and beyond, as per the recent developments."
InvestingPro Insights
As David B. Kaplan, Co-Founder of Ares Management Corp (NYSE:ARES), reduces his stake in the company, investors might be curious about the current financial health and market performance of ARES. Recent data from InvestingPro sheds light on the company's position.
Ares Management has demonstrated strong market performance, with a year-to-date price total return of 50.61% as of the latest data. This impressive growth is further underscored by the company's 1-year price total return of 65.71%, indicating sustained investor confidence. The stock is currently trading near its 52-week high, at 99.26% of that peak, which aligns with an InvestingPro Tip noting that ARES is "Trading near 52-week high."
From a valuation perspective, ARES is trading at a high earnings multiple, with a P/E Ratio (Adjusted) of 106.66 for the last twelve months as of Q3 2024. This elevated valuation suggests that investors have high expectations for future growth, although it may also indicate that the stock is potentially overvalued at current levels.
Despite the recent insider selling, it's worth noting that Ares Management has maintained a strong dividend policy. An InvestingPro Tip highlights that the company "Has raised its dividend for 5 consecutive years," with a current dividend yield of 2.12%. This commitment to shareholder returns may provide some reassurance to investors concerned about the insider sale.
For those interested in a deeper analysis, InvestingPro offers 12 additional tips on ARES, providing a more comprehensive view of the company's financial health and market position. These insights can be particularly valuable in light of recent insider transactions and the company's current market valuation.
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