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Ares Management (ARES) Moves 5.5% Higher: Will This Strength Last?
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Ares Management (ARES - Free Report) shares rallied 5.5% in the last trading session to close at $56.03. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.2% gain over the past four weeks.
Ares Management extended its rally for the second consequent day and touched a new 52-week high of $57.33. The last day’s rally was largely driven by the company’s announcement of signing a agreement to acquire 100% of Landmark Partners, LLC and its operating subsidiaries for $1.08 billion.
Landmark Partners, founded in 1989, is one of the most experienced investors in the secondary markets. As of Dec 31, 2020, it had assets under management balance of $18.7 billion. The transaction is expected to result in substantial investing advantages across Ares Management’s platform.
The deal, expected to close in the second quarter 2021 and still subject to regulatory approvals, is projected to be immediately financially accretive to Ares Management’s core earnings metrics. It is expected to further strengthen the company’s “fee related earnings composition within our realized income.”
Price and Consensus
This private equity firm is expected to post quarterly earnings of $0.51 per share in its upcoming report, which represents a year-over-year change of +13.3%. Revenues are expected to be $436.8 million, up 1.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Ares Management, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ARES going forward to see if this recent jump can turn into more strength down the road.
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Ares Management (ARES) Moves 5.5% Higher: Will This Strength Last?
Ares Management (ARES - Free Report) shares rallied 5.5% in the last trading session to close at $56.03. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.2% gain over the past four weeks.
Ares Management extended its rally for the second consequent day and touched a new 52-week high of $57.33. The last day’s rally was largely driven by the company’s announcement of signing a agreement to acquire 100% of Landmark Partners, LLC and its operating subsidiaries for $1.08 billion.
Landmark Partners, founded in 1989, is one of the most experienced investors in the secondary markets. As of Dec 31, 2020, it had assets under management balance of $18.7 billion. The transaction is expected to result in substantial investing advantages across Ares Management’s platform.
The deal, expected to close in the second quarter 2021 and still subject to regulatory approvals, is projected to be immediately financially accretive to Ares Management’s core earnings metrics. It is expected to further strengthen the company’s “fee related earnings composition within our realized income.”
Price and Consensus
This private equity firm is expected to post quarterly earnings of $0.51 per share in its upcoming report, which represents a year-over-year change of +13.3%. Revenues are expected to be $436.8 million, up 1.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Ares Management, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ARES going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>