A Trio of Players
In Upside — a speciality advisory service focused on small to mid-cap stocks — editor and quantitative analyst Richard Moroney looks at a trio of players in financial products, investment banking and asset management.
Apollo Global Management (APO), a leading alternative asset manager, focuses on private equity, real estate, and credit securities.
On December 31st, assets under management (AUM) totaled $192 million, up 13% from a year earlier. Credit investments, which include specialty loans and distressed debt, accounted for 71% of assets.
Since 2006, Apollo has grown assets at a 22% annualized rate. Clients include pensions and endowments. The stock earns a Quadrix Overall score of 99, reflecting outstanding marks for Momentum (99) and Value (92).
Apollo comes with special risks, reflecting the speculative and illiquid nature of some of its investments. In addition, the company was scheduled to report March-quarter results on April 28th.
Buying ahead of an earnings release is chancy, but expectations for the quarter have been rising over the last month. Wall Street targeted per-share profits of $0.63, compared to a loss in the year-earlier period.
For 2017, per-share earnings are projected to dip slightly to $2.33. Apollo is a limited partnership, so stockholders receive a K-1 form to help file taxes. The company has a variable dividend, paying most of its distributable earnings on a quarterly basis. Apollo, yielding 7%, is being initiated as Buy.
Investment bank Evercore Partners (EVR) earns an Overall score of 98, supported by ranks of 60 or higher for all six Quadrix categories.
The shares have rallied 15% in 2017, versus 3% for the median stock in the S&P 1500 diversified-financial industry.