Shareholders of Ares would probably like to forget the past six months even happened. The stock dropped 22.3% and now trades at $129.45. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Given the weaker price action, is now a good time to buy ARES? Find out in our full research report, it’s free.
Why Is Ares a Good Business?
With roots in the leveraged finance group of Apollo Management, Ares Management (NYSE: ARES) is an alternative investment firm that manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients.
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Over the last five years, Ares grew its revenue at an exceptional 23.2% compounded annual growth rate. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Ares’s spectacular 21.3% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Final Judgment
These are just a few reasons why we think Ares is one of the best financials companies out there. With the recent decline, the stock trades at 21.5× forward P/E (or $129.45 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
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