My very quick read of the BX report suggests APO remains significantly undervalued relative to BX. BX trades at about 19x LTM (last twelve months) DNI (distributable net income) while APO trades at about 8. If the market recognizes this I suspect that APO can trade up to the low 40s before consolidating back at around 36. APO earnings are coming out in a few weeks and Analysts are predicting a dividend of about 62 cents per share. The issue facing APO is restocking their pipeline of deals. Their recent deal activity indicates they favor energy, insurance and consumer. BX has 260 bn in AUM (assets under management) to APO 161bn but APO has a better investment track record in PE than BX so their realization revenue (incentive fees) is richer than BX.
Great post. I agree with you but the market does not.
Leon Black made a stupid comment when he said he was selling everything that was not nailed down.
That left the impression there was little left to sell and that the best results were in the past.
We will see on May 6 what they report.
The markets don't understand these stocks which creates buying opportunities for investors. If you are a trader then you should worry a bit about the volatility. If you are an investor keep adding to positions at these levels. Q1 DNI will be somewhere between .66-.76. Not a bad yield on the stock. If you look at the companies they have in the pipeline and assume they sell them over the next 24-36 months, I project a regular annual dividend over this time frame of between $3-$4 per share. Not bad if you buy at $29.