Should You Buy Apollo Global Management LLC (APO)?

Apollo Global Management LLC (NYSE:APO) was in 10 hedge funds’ portfolio at the end of the first quarter of 2013. APO investors should pay attention to an increase in hedge fund sentiment recently. There were 7 hedge funds in our database with APO holdings at the end of the previous quarter.

In today’s marketplace, there are tons of indicators market participants can use to watch Mr. Market. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outperform the broader indices by a very impressive amount (see just how much).

Just as important, bullish insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a number of reasons for an insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders understand what to do (learn more here).

Keeping this in mind, we’re going to take a look at the key action encompassing Apollo Global Management LLC (NYSE:APO).

What does the smart money think about Apollo Global Management LLC (NYSE:APO)?

In preparation for this quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 43% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly.

Of the funds we track, GMT Capital, managed by Thomas E. Claugus, holds the largest position in Apollo Global Management LLC (NYSE:APO). GMT Capital has a $103 million position in the stock, comprising 2.3% of its 13F portfolio. Coming in second is Oaktree Capital Management, managed by Howard Marks, which held a $27.1 million position; 0.6% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Richard Driehaus’s Driehaus Capital.

Consequently, key money managers have jumped into Apollo Global Management LLC (NYSE:APO) headfirst. Renaissance Technologies, managed by Jim Simons, initiated the largest position in Apollo Global Management LLC (NYSE:APO). Renaissance Technologies had 7.2 million invested in the company at the end of the quarter. Martin Hughes’s Toscafund Asset Management also made a $1.7 million investment in the stock during the quarter. The following funds were also among the new APO investors: Robert Raiff’s Raiff Partners, Matthew Hulsizer’s PEAK6 Capital Management, and John Overdeck and David Siegel’s Two Sigma Advisors.

How are insiders trading Apollo Global Management LLC (NYSE:APO)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Apollo Global Management LLC (NYSE:APO) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Apollo Global Management LLC (NYSE:APO). These stocks are NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), Apollo Investment Corp. (NASDAQ:AINV), Ares Capital Corporation (NASDAQ:ARCC), A.F.P Provida SA (ADR) (NYSE:PVD), and CBOE Holdings, Inc (NASDAQ:CBOE). This group of stocks are in the diversified investments industry and their market caps resemble APO’s market cap.