A recent filing with the Securities and Exchange Commission has revealed that David B. Kaplan, Co-Founder of Ares Management Corp (NYSE:ARES), has sold a significant portion of his holdings in the company. The transactions, which took place between August 28 and August 30, amounted to a total of $8,104,233.
The sales were executed in multiple transactions with prices ranging from $144.63 to $146.34 per share. On August 28, Kaplan sold 22,247 shares at an average price of $145.17 and 5,440 shares at an average of $145.85. The following day, he continued to divest 8,690 shares at an average of $144.78 and 4,849 shares at $145.65 per share. On August 30, Kaplan sold another 3,470 shares at $144.63 and 5,294 shares at $145.50. Finally, he sold 5,772 shares at an average price of $146.34, bringing his direct holdings to zero.
It's noteworthy that these transactions were made pursuant to a Rule 10b5-1 trading plan, which was adopted on May 16, 2024. 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, providing a defense against accusations of insider trading.
The SEC filing also indicated that Kaplan indirectly owns shares through Ares Owners Holdings L.P., where he is a limited partner. The nature of this ownership suggests that Kaplan still maintains an indirect stake in the company's performance.
Investors often monitor insider selling for signals about the company's future performance, although such transactions do not always indicate a lack of confidence by executives in their firm. For Ares Management Corp, this recent filing provides a clear record of one insider's stock transactions, offering transparency for shareholders and potential investors.
In other recent news, the National Football League (NFL) has approved private equity firms, including Ares Management, Arctos Partners, Sixth Street, and a consortium made up of Blackstone (NYSE:BX), Carlyle, CVC, and Dynasty Equity, to acquire up to 10% stakes in its teams. These firms have collectively committed to a significant $12 billion investment. This decision marks a significant shift in the NFL's traditional ownership structure. In related news, Ares Management has been rated Neutral by Redburn-Atlantic, which set a price target of $140.00. TD Cowen, however, has raised its price target for Ares Management from $158.00 to $162.00, indicating a positive outlook for the company.
Automated Industrial Robotics Inc. (AIR) has acquired UK-based Sewtec Automation, with the acquisition primarily funded by an investment from a private equity fund managed by Ares Management. The move is aimed at expanding AIR’s global presence and engineering capabilities. On a separate note, Hyatt Hotels (NYSE:H) Corporation has sold Hyatt Regency Orlando and an adjacent parcel of land for approximately $1.07 billion to RIDA Development Corporation and an Ares Management Real Estate fund. This sale aligns with Hyatt's strategy to divest owned properties.
Ares Management has reported a third-quarter common dividend of $0.93 per share, marking a 21% increase from the previous year, and reported a record $447 billion in assets under management, an 18% increase year-over-year. The company also plans to launch new products in the private wealth channel and explore merger and acquisition opportunities. These are recent developments that provide an insight into the activities of the mentioned companies.
InvestingPro Insights
In light of the recent insider selling at Ares Management Corp (NYSE:ARES), investors may be looking for additional context to assess the company's financial health and market performance. According to InvestingPro data, Ares Management has a market capitalization of $45.72 billion, indicating a substantial presence in its sector. The company's P/E ratio stands at a high 73.46, which may suggest that the stock is trading at a premium compared to its earnings. This is further emphasized by the adjusted P/E ratio for the last twelve months as of Q2 2024, which is even higher at 98.47.
When examining the company's growth metrics, Ares Management has experienced a revenue decline of 11.64% over the last twelve months as of Q2 2024. This could be a point of concern for investors, especially when combined with a quarterly revenue decline of 27.86% in Q2 2024. Despite these figures, the company has maintained a strong gross profit margin of 48.01%, which may indicate effective cost management and a solid business model.
Two InvestingPro Tips that could be particularly relevant to investors considering the implications of Kaplan's stock sales are: Ares Management has maintained dividend payments for 11 consecutive years, underscoring a commitment to shareholder returns, and analysts predict the company will be profitable this year, providing a potential counterbalance to the concerns raised by the recent insider trading activity. For investors seeking more detailed analysis, InvestingPro offers additional tips, including insights on earnings revisions and liquidity concerns, which can be found at https://www.investing.com/pro/ARES.
It's important to note that while insider transactions can provide valuable clues, they should be considered as part of a broader investment strategy. With 11 additional InvestingPro Tips available for Ares Management, investors have access to a comprehensive toolset for making informed decisions.
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