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Apollo Global Management, LLC Message Board

  • iamasimpleguy6180 iamasimpleguy6180 Aug 26, 2013 2:47 PM Flag

    APO Q2 & Looking Ahead to Future Dividends

    Just finished reviewing Q2 results and updating my own Q3 & Q4 dividend forecast.

    Point 1) On their Q2 earnings call the CFO said they already have $.56 in realizations per share (proxy for the next dividend). Since the end of Q2, based on public disclosures, they are selling their big holdings in LYB which is either part of the $.56 or could be additive to this number. Their big winner during Q3 was the flotation of Sprouts (SFM) which could be worth as much as $2 per share if shares were fully sold at current levels. They probably have to hold SFM for 6 months so unlikely this would flow to APO shareholders until closer to year-end.
    Point 2) The rest of their public portfolio, which includes LYB, BERY, CZR, ATHL, TM, NCLH, RLGY & EVTC, is up materially since the end of Q2 and if you assume they were to sell it all in Q3 (remember that Leon Black was quoted as saying that APO is selling everything that is not nailed down) then my rough math suggests about $2 per share in incremental divs that will be distributed to APO shareholders when sold. If you look at their Q2 Balance Sheet accounts "Unrealized Carry" net of "Profit Sharing", it equates to about $8 per share. Add the incremental value of SPF ($2 per share) and the change in value of all other public holdings (another $2) you get roughly $12 per share. If they sell these holding into the market at current levels over the next 3 quarters, before the inevitable correction comes, you could see $4/3 or 1.33 per quarter on average.
    Point 3) The non-public part of their portfolio is part of the $8 per share in Net Unrealized Carry cannot be tracked but if you assume it rises with the general market, its held its value. At a currprice of $27, your return is 15% flat or 20% per annum. This stock is for investors not traders so buy the dips. The company has a new $10bn fund with buying power of roughly 3x which that will be used to restock the pipeline at appropriate price levels.

    Sentiment: Buy

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