We recently published a list of the 10 Best Stock Picks of Billionaire Leon Cooperman in 2024. Since Apollo Global Management, Inc. (NYSE:APO) ranks 5th on the list, it deserves a deeper look.
Billionaire Leon Cooperman predicted in April that the US is headed for a financial crisis. Cooperman said that the Federal Reserve kept interest rates near zero, but raised them dramatically in a period of 12 months. The Omega Family Office chairman and CEO expects “one or two” rate cuts this year. He emphasized that the market remains overvalued.
In February last year, the billionaire said that the market was headed for a recession, and noted that the S&P 500 high of about 4,800 recorded in 2022 could “stand for some time.” In July 2022, while talking to Bloomberg, Cooperman said that he was “shocked” that interest rates were so low.
“I am of the view that equities are the best house in the financial asset in the neighborhood, but I don’t like the neighborhood, for a lot of reasons.”
Cooperman in the Bloomberg interview in 2022 had categorically said that sooner or later the strong dollar, prices of oil and the Fed would “lead us into a recession.” He went on to add that recession would be a “2023 event” and predicted that the market would bottom somewhere near 35% to 45% below its peak of 4800.
The billionaire had said that he would be “very surprised” if we were to see another bull market anytime soon, given his view that we’ve had one of the biggest bull runs driven by FAANG, SPACs and speculation. The AI revolution that started in 2023 was indeed a shocker for Cooperman as his recession predictions were proven wrong.
For this article we scanned billionaire Leon Cooperman’s Q1 portfolio and picked 10 stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Apollo Global Management, Inc. (NYSE:APO)
Number of Hedge Fund Holders: 77
Apollo Global Management, Inc. (NYSE:APO) is one of the best stocks in Leon Cooperman based on hedge fund sentiment. A total of 77 hedge funds tracked by Insider Monkey had stakes in Apollo Global Management, Inc. (NYSE:APO) as of the end of the fourth quarter of 2023. Omega Advisors owns about 1.6 million shares of Apollo Global Management, Inc. (NYSE:APO) as of the end of the first quarter of 2024, worth about $183 million.
Baron Funds mentioned in its Q1 investor letter talked about the reason why it’s bullish on APO and why the stock was a top performer in its portfolio:
“Shares of alternative asset manager Apollo Global Management, Inc. (NYSE:APO) outperformed after the company reported strong financial results and gave a positive outlook on growth over the next several years. In the most recent quarter, assets under management increased 19% and earnings per share increased 27%. Despite a more dovish interest rate outlook, management maintained 2024 financial guidance, which calls for 15% to 20% growth in fee-related earnings and double-digit growth in spread-related earnings. Fundraising remains strong, which supports management’s goal of more than doubling the pace of capital deployment over the next five years. Management remains bullish on private credit due to growth opportunities across fixed income replacement, retirement accounts, and high-net-worth investors.”
Apollo Global Management, Inc. (NYSE:APO) is one of the most popular stocks these days amid the rise of alternative assets and the market’s increasing interest in private equity. As of the end of the first quarter, Apollo Global Management, Inc. (NYSE:APO) had $501 billion AUM of alternative credit. The stock is up 30% so far this year. The company plans to double its AUM by 2026 and reach $1 trillion over the next two years. Apollo Global Management, Inc. (NYSE:APO) is also a notable player in the retirement services business thanks to its acquisition of Athene. Apollo now generates around $100 billion in credit each year, which supports Athene’s growth. The company also benefited from the trend where banks started reducing their lending after the 2008-2009 Global Financial Crisis. As banks shifted their focus to larger borrowers and fee-based businesses, loans went to companies like Apollo, which could match these loans with long-term funding. Despite strong growth Apollo Global’s shares trade at a forward P/E of 15.62, which is attractive given the company’s earnings growth estimate of 20.10% set by Wall Street for 2024.
Overall, Apollo Global Management, Inc. (NYSE:APO) ranks 5th on Insider Monkey’s list titled 10 Best Stock Picks of Billionaire Leon Cooperman in 2024. While we acknowledge the potential of Apollo Global Management, Inc. (NYSE:APO), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Apollo Global Management, Inc. (NYSE:APO) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.