Apollo Global Management is finding support at the 50-day moving average. The growth stock is today's pick for IBD 50 Growth Stocks To Watch.
Shares broke out of a cup base at a buy point of 74.63 in mid-June and became extended, according to IBD MarketSmith chart analysis. But the 50-day line and cousin 10-week moving average now offer a buy point of 79.45 with a buy zone to 87.40. But keep in mind that with the stock market in correction, it's a risky time to buy stocks.
Apollo has a below-adequate Composite Rating. But its Relative Strength Rating of 94 improved from 92 four weeks ago and from 66 three months back, showing that shares have been outperforming most other stocks in recent weeks.
The private equity firm made an impressive show in the second quarter. Sales grew 499% to $13.7 billion, following increases of 65%, 176% and 305% in the previous quarters.
Apollo earned $1 per share vs. a year-ago loss of $2.82. The firm also posted losses in Q3, but returned to profitability in Q4.
Growth Stock Finding Support
Shares rose to new highs following the Aug. 3 earnings report but pulled back to the 50-day line. The growth stock is attempting a rebound right now.
Mutual funds own 42% of shares outstanding. The Accumulation/Distribution Rating of B- also shows a good amount of interest from fund managers.
As of June, Apollo had $617 billion in assets under management, including $35 billion in new inflows. Assets under management grew 20% from the prior year. Fee-generating assets increased 21%, largely due to the growth of its retirement product, Athene.
The firm invests in private and public markets using three different strategies.
Its yield business offers credit, direct lending, corporate fixed income and commercial real estate debt. The firm also provides a hybrid debt and equity approach to meet businesses' capital needs.
The company's equity dealings include corporate buyouts and distressed investments. Its real estate funds include single as well as multiple assets.
Deals Drive Apollo
Apollo is also part of a proposed deal to take over mining and metals company Arconic Group for $4.7 billion. The deal is expected to close in the second half of the year, with shareholders getting $30 in cash per share. According to an S&P Global Market Intelligence report, the deal is the second largest ever in the mining and metals sector.
In July, the private equity firm also announced plans to make an investment in retailer PetSmart.
Back in October 2022, Apollo pulled out of supporting Tesla Chief Elon Musk's plans to acquire Twitter. APO stock has gained 47% since.
Apollo went public in 2011 and trades on the New York Stock Exchange. The growth stock has added 28% in gains so far this year, handily beating the S&P 500's return of 14%.
Exchange traded funds that hold APO include the iShares Russell 1000 Growth ETF and the Global X U.S. Preferred ETF.
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