Ares Management Corp (NYSE:ARES) CEO and President Michael J. Arougheti has sold a significant portion of his holdings in the company, according to a recent filing with the Securities and Exchange Commission. The transactions, which took place between August 23 and August 27, 2024, involved the sale of Class A Common Stock and totaled over $11.9 million.
The sales occurred over a range of prices, starting at $144.49 and going up to $147.95. The SEC filing detailed multiple transactions with varying average prices, indicating that the shares were sold in several batches at different price points within the stated range. The specific number of shares sold at each separate price has not been disclosed in the filing, but Arougheti has committed to providing full information upon request.
Arougheti, who is also a co-founder of Ares Management, conducted these sales through Atticus Enterprises LLC, an entity indirectly owned by him. The transactions were executed pursuant to a 10b5-1 trading plan, a trading plan adopted for the sale of shares well in advance of the actual transaction, which allows insiders to sell their shares at predetermined times to avoid accusations of insider trading.
The SEC filing also mentioned that Arougheti still owns a substantial number of shares after the sales, with 55,723 shares remaining in his direct possession. Additionally, the filing referenced 1,375,000 restricted units granted under an equity incentive plan, which will vest in installments according to the applicable award agreement. Each restricted unit represents the right to receive one share of Class A Common Stock upon vesting.
Investors often monitor insider transactions as they can provide insights into executives' perspectives on their company's performance and future prospects. The sale of a large number of shares by a high-ranking executive such as Arougheti may draw significant attention from the investment community, although it does not necessarily indicate a lack of confidence in the company's future.
In other recent news, the National Football League (NFL) has allowed private equity firms, including Ares Management, Arctos Partners, Sixth Street, and a consortium of Blackstone (NYSE:BX), Carlyle, CVC, and Dynasty Equity, to acquire up to 10% stakes in its teams. This shift in ownership structure is a significant development for the NFL, which has traditionally barred private equity ownership. In other developments, Ares Management's stock has been rated Neutral by Redburn-Atlantic, recognizing the company's robust origination network but also acknowledging potential challenges due to growing competition in private credit markets. Furthermore, Automated Industrial Robotics Inc. (AIR) has acquired UK-based Sewtec Automation, a move funded by an investment from a private equity fund managed by Ares Management. This acquisition aligns with AIR's growth strategy to meet the increasing international demand for manufacturing automation solutions. Hyatt Hotels (NYSE:H) Corporation has also 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, as part of Hyatt's strategy to divest owned properties. Lastly, Ares Management has reported a third-quarter common dividend of $0.93 per share, marking a 21% increase from the previous year, and a record $447 billion in assets under management, an 18% increase year-over-year. TD (TSX:TD) Cowen has raised its price target for Ares Management from $158.00 to $162.00, indicating a positive outlook for the company.
InvestingPro Insights
In light of the recent insider transactions by Ares Management Corp's (NYSE:ARES) CEO Michael J. Arougheti, investors may find additional context in the company's financial metrics and market performance. Ares Management Corp's market capitalization stands at a robust $45.83 billion, reflecting the company's significant presence in the investment management sector. Despite a challenging environment, Ares has maintained a dividend yield of 2.55%, showcasing its commitment to shareholder returns. This is further evidenced by the company's track record of raising its dividend for four consecutive years, an InvestingPro Tip that signals a stable income stream for investors.
However, it's worth noting that Ares is trading at a high earnings multiple, with a P/E ratio of 74.34 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at 98.29. The company's Price/Book ratio during the same period is also elevated at 22.9. These metrics suggest that the company's stock is priced at a premium compared to its book value and near-term earnings growth, which is an InvestingPro Tip indicating that the market may be factoring in high expectations for Ares' future performance. Additionally, analysts have revised their earnings expectations downwards for the upcoming period, which could be a point of consideration for those looking into the company's stock.
For investors seeking a deeper dive into Ares Management Corp's financials and market outlook, InvestingPro offers a wide array of tips, with 11 additional insights available to help inform investment decisions. These insights include analysis on the company's profitability, return on assets, and revenue growth, among others.
It's important to keep in mind that while insider sales can offer a glimpse into executive sentiment, they are just one piece of the broader investment puzzle. By considering both the insider transactions and the company's financial health, investors can make more informed decisions regarding Ares Management Corp.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.