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Is Apollo the Best Investment Management Stock Right Now?

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With the end of a six-year growth in asset prices, the investment management industry is about to face significant challenges related to survival. Following the financial crisis, rising asset prices have helped the investment managers to maintain margins despite the shift of investors to low-cost investment strategies and product solutions.

Currently, increasing client demand for lower fees, new regulations, and closer scrutiny of the social value of the investment management industry has left firms in great despair. These issues in turn have resulted in lower revenues for these companies, as they are now forced to focus more on improving their technology and delivering sustainable returns to the investors.

Reflecting these concerns, the Investment management industry holds a Zacks Industry Rank of #165 (Bottom 38%).

However, one of the Zacks covered industry players Apollo Global Management, LLC (APO - Free Report) currently sports a Zacks Rank #1 (Strong Buy) and has a number of other aspects that make it an attractive investment option. The stock has already gained 18.9% since the beginning of the year and is expected to gain further in the near to medium term based on its financial strength.

Why is Apollo a Good Stock to Bet On?

Earnings Strength: Apollo Global has witnessed earnings per share growth rate of 47.5% over a period of 3-5 years. Moreover, the earnings growth rate for the current year is expected to be 73.6%.

Revenue Growth: Organic growth remains solid at Apollo Global. Revenues grew at a CAGR of 57% over the last five years (2011–2015). Further, top line is expected to grow 41.9% in 2016.

Return on Equity: Apollo Global has a return on equity of 12.5% compared with the industry average of 11.2%.

Price-to-Earnings (P/E) Ratio: Apollo Global’s P/E ratio stands at 10.76 compared with the industry average of 12.65, indicating that the stock is undervalued.

Other Stocks to Consider

If you are interested in stocks in the finance space, you may consider Meta Financial Group, Inc. (CASH - Free Report) , Flagstar Bancorp Inc. and HomeStreet, Inc. (HMST - Free Report) as well. Each of these stocks carry a Zack Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Apollo Global Management Inc. (APO) - free report >>

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