Chase Coleman (Trades, Portfolio) has revealed a reduction in his Apollo Global Management Inc. (APO, Financial) holding according to GuruFocus’ Real-Time Picks, a Premium feature.
The New York-based company utilizes strategies that Coleman learned from Tiger Management founder Julian Robertson (Trades, Portfolio). Team members focus investments primarily in small-cap and technology stocks, but they also have an eye out for early- to late-stage venture, post-initial public offering and secondary market equities that fall within their requirements.
The sale of 7.43 million shares on Sept. 9 came hot on the heels of an 11.06% reduction in the second quarter. The most recent sale saw the shares trading at an average price of $61.14 and cut the holding by 23.96%. Overall, the sale had a -0.85% impact on the portfolio and GuruFocus estimates the total gain of the holding at 136.69%.
Apollo Global Management is an alternative investment manager. It serves various sectors such as chemicals, manufacturing and industrial, natural resources, consumer and retail, consumer services, business services, financial services, leisure and media and telecom technology. The company operates in three business segments: Private Equity, Credit, and Real Assets. It generates maximum revenue from the Credit segment in the form of fees. The credit segment primarily invests in non-control corporate and structured debt instruments including performing, stressed and distressed instruments across the capital structure.
On Sept. 10, the stock was trading at $61.14 per share with a market cap of $14.38 billion. According to the GF Value Line, the stock is a potential value trap and investors should think twice before purchasing shares.
GuruFocus gives the company a financial strength rating of 4 out of 10, a profitability rank of 7 out of 10 and a valuation rank of 8 out of 10. There are currently four severe warning signs issued for assets growing faster than revenue, a Beneish M-Score indicating the company may manipulate its financials, declining revenue per share and an Altman Z-Score placing the company in the distress column. The company’s cash-to-debt ratio of 0.19 ranks it lower than 79.56% of industry competitors after a debt spike in 2020 that has caused a medium warning sign to be issued.
Coleman is currently the top shareholder in Apollo Global Management with 10.03% of shares outstanding. Other top guru shareholders include Tom Gayner (Trades, Portfolio), Pioneer Investments, Jim Simons (Trades, Portfolio), Julian Robertson (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio).
Portfolio overview
At the end of the second quarter, the guru’s portfolio contained 142 stocks with 25 new holdings. It was valued at $53.76 billion and has seen a turnover rate of 15%. Top holdings include JD.com Inc. (JD, Financial), Microsoft Corp. (MSFT, Financial), Sea Ltd. (SE, Financial), Roblox Corp. (RBLX, Financial) and DocuSign Inc. (DOCU, Financial).
The top sectors represented are technology (46.43%), consumer cyclical (23.19%) and communication services (19.86%).
