Don't Ignore The Insider Selling In Apollo Global Management

We wouldn't blame Apollo Global Management, Inc. (NYSE:APO) shareholders if they were a little worried about the fact that James Zelter, the Co-President of Apollo Asset Management Inc. & Director recently netted about US$11m selling shares at an average price of US$110. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 3.6%.

Check out our latest analysis for Apollo Global Management

Apollo Global Management Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Leon Black, for US$173m worth of shares, at about US$112 per share. That means that even when the share price was slightly below the current price of US$114, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 3.5% of Leon Black's stake.

Happily, we note that in the last year insiders paid US$333k for 3.36k shares. But they sold 2.71m shares for US$296m. All up, insiders sold more shares in Apollo Global Management than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like Apollo Global Management better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Apollo Global Management Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Apollo Global Management insiders own about US$13b worth of shares (which is 21% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Apollo Global Management Insider Transactions Indicate?

The stark truth for Apollo Global Management is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Apollo Global Management is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Apollo Global Management has 1 warning sign and it would be unwise to ignore it.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.