While few growth stocks are showing buy opportunities in this market, today's IBD 50 Stocks To Watch pick is an exception. Shares of Ares Management, an investment management stock, is trading just below a new buy point.
According to its website, Ares Management is a leading global alternative investment manager. The firm offers clients investment solutions across asset classes such as credit and real estate.
Ares Management has been basing since mid-November and has formed a double-bottom base. Shares marked an 84.20 entry near the end of December, according to MarketSmith.
Notably, this is a stage one base, which means it has a higher chance of working out than a later stage base. Share have dipped below the 21-day and 50-day lines multiple times to form the current base but have regained both areas of support. The stock is around 5% below the proper entry.
The relative strength line shows positive action in recent weeks as it inches toward highs. Also, the stock has been rising in heavy volume in recent sessions, a bullish sign.
Investors should be aware that earnings are due Friday, Feb. 11. Earnings could ultimately catalyze a strong move higher or lower in the stock price and therefore, adds risk to an investment.
Growth Stocks To Watch: Ares Management
Ares Management managed to grow revenue and earnings at an impressive rate in the two most recent quarters. Year-over-year earnings growth came in at 97% and 67%, respectively. Ares Management's sales rose 115% and 94%, respectively, in the two most recent quarters.
According to the company's most recent earnings news release, the Los Angeles-based firm saw impressive growth in the most recent third quarter due to higher demand for alternative investment options. Ares, a leading alternative investment manager, has most of its revenue coming from credit and private equity segments.
The company has approximately $282 billion in assets under management with more than 30 offices worldwide, as of September 30, 2021. Their largest portfolio is in the credit segment with $181.2 billion in assets under management.
"Our third quarter results demonstrate our continued strong performance across our key metrics with record levels of AUM, management fees and fee related earnings, all of which grew more than 50% on a year over year basis," said CEO Michael Arougheti. "We raised more than $20 billion in capital for the second straight quarter, bringing year to date fundraising to a new annual record of $51.6 billion as institutional and retail investors continue to seek the benefits of private market alternatives."
