Jay Horgen Takes A Bullish Stance, Acquiring $51.38M Worth Of Affiliated Managers Group Stock Options

A noteworthy insider acquisition was disclosed on March 7, as Horgen, President and CEO at Affiliated Managers Group AMG, reported the acquisition of stock options for 600,000 shares.

What Happened: Horgen, President and CEO at Affiliated Managers Group, engaged in a derivative transaction according to a Form 4 filing on Thursday with the U.S. Securities and Exchange Commission. This involved the acquisition of stock options for 600,000 shares of AMG, providing the right to purchase the company's stock at an exercise price of $74.49 per share.

The latest update on Friday morning shows Affiliated Managers Group shares down by 0.0%, trading at $160.13. At this price, Horgen's 600,000 shares are worth $51,384,000.

Discovering Affiliated Managers Group: A Closer Look

Affiliated Managers Group offers investment strategies to investors through its network of affiliates. The firm typically buys a majority interest in small to midsize boutique asset managers, receiving a fixed percentage of revenue from these firms in return. Affiliates operate independently, with AMG providing strategic, operational, and technology support, as well as global distribution. At the end of December 2023, AMG's affiliate network—which includes firms like AQR Capital Management, and Pantheon in alternative assets and other products (which accounted for 35% of AUM), Artemis, Genesis, Harding Loevner, and Tweedy Browne in global and emerging-market equities (28%) and Frontier, River Road, Parnassus, and Yacktman in U.S. equities (21%)—had $672.2 billion in managed assets.

Unraveling the Financial Story of Affiliated Managers Group

Decline in Revenue: Over the 3 months period, Affiliated Managers Group faced challenges, resulting in a decline of approximately -6.87% in revenue growth as of 31 December, 2023. This signifies a reduction in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Financials sector.

Key Profitability Indicators:

• Gross Margin: The company shows a low gross margin of 51.35%, suggesting potential challenges in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Affiliated Managers Group's EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 5.83.

Debt Management: Affiliated Managers Group's debt-to-equity ratio is below the industry average. With a ratio of 0.71, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

Analyzing Market Valuation:

• Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 9.19, the stock indicates an attractive valuation, potentially presenting a buying opportunity.

• Price to Sales (P/S) Ratio: With a P/S ratio of 3.28 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio lower than industry benchmarks at 5.1, Affiliated Managers Group presents an attractive value opportunity.

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

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Illuminating the Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Essential Transaction Codes Unveiled

When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Affiliated Managers Group's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.