LOS ANGELES—Michael J. Arougheti, Co-Founder, CEO, and President of Ares Management Corp (NYSE:ARES), recently sold a significant portion of his holdings in the company. According to a Form 4 filing with the Securities and Exchange Commission, Arougheti sold shares worth approximately $13.45 million.
The transactions, which took place over a three-day period from November 20 to November 22, involved the sale of Class A Common Stock at prices ranging from $170.04 to $176.53 per share. These sales were conducted through Atticus Enterprises LLC, a vehicle controlled by Arougheti.
Following these transactions, Arougheti retains ownership of 116,201 shares directly through Atticus Enterprises LLC and holds an additional 1,375,000 restricted units that are set to vest according to the company's equity incentive plan. The sales were made under a 10b5-1 trading plan, which was adopted on December 14, 2023.
This series of transactions reflects a strategic move by Arougheti as part of his ongoing financial management and investment planning. Investors and analysts will be watching closely to see how these sales might influence the company's stock performance in the near term.
In other recent news, Ares Management Corporation has shown impressive growth in its third-quarter earnings. The firm reported an increase of 18% in management fees, a 24% rise in fee-related earnings, and a 28% growth in realized income. Ares Management has also been active in the global market, deploying nearly $30 billion in the quarter, contributing to a total of $74.6 billion for the year. Record-breaking fundraising efforts have also been noted, with nearly $21 billion raised in the third quarter alone.
RBC Capital Markets recently updated its outlook on Ares Management, raising the price target to $185 from the previous $170 while maintaining an Outperform rating. The revised perspective reflects the firm's financial potential and its position within the private credit sector. The analyst from RBC Capital noted the company's ongoing investments and slightly revised down the Earnings Per Share (EPS) estimates. Despite the adjustments to earnings expectations, the analyst expressed recognition of the potential resilience in Ares Management's fundraising momentum.
The company has launched new products, including a special opportunities fund and a tax-efficient core infrastructure fund, further diversifying its portfolio. Ares' wealth management has also gained momentum, with a 57% increase in AUM year-over-year. However, the company expects a decrease in the FRE margin to around 40% in Q4 due to various factors, including increased compensation costs. Despite this, Ares projects strong Q4 performance with anticipated fee-related performance revenues between $160 million and $170 million and expects continued growth in AUM and performance income in 2025 and beyond. These are recent developments in the company's operations.
InvestingPro Insights
To provide additional context to Michael J. Arougheti's recent stock sales, it's worth examining some key financial metrics and insights from InvestingPro for Ares Management Corp (NYSE:ARES).
As of the latest data, Ares Management boasts a substantial market capitalization of $55.05 billion, underscoring its significant presence in the asset management industry. The company's stock has demonstrated remarkable performance, with a one-year price total return of 65.71% as of the most recent data. This strong performance aligns with one of the InvestingPro Tips, which notes that Ares has shown a "High return over the last year."
Additionally, Ares Management is currently trading near its 52-week high, with the stock price at 99.26% of its peak. This information, coupled with the InvestingPro Tip that the company is "Trading near 52-week high," suggests that investor confidence in Ares remains robust despite the CEO's recent stock sales.
From a valuation perspective, Ares Management's P/E ratio stands at 79.03, indicating that the stock is trading at a premium compared to earnings. This is further supported by an InvestingPro Tip stating that Ares is "Trading at a high earnings multiple." While this high valuation might raise questions for some investors, it's important to note that the company has maintained dividend payments for 11 consecutive years, demonstrating a commitment to shareholder returns.
For readers interested in a more comprehensive analysis, InvestingPro offers 12 additional tips for Ares Management, providing a deeper understanding of the company's financial health and market position.
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