Insider Decision: Jay Horgen Exercises Options At Affiliated Managers Group For $19.14M

A significant insider transaction involving the exercise of company stock options was reported on August 20, by Jay Horgen, President and CEO at Affiliated Managers Group AMG, as per the latest SEC filing.

What Happened: Disclosed in a Form 4 filing on Tuesday with the U.S. Securities and Exchange Commission, Horgen, President and CEO at Affiliated Managers Group, executed a strategic derivative sale. This involved exercising stock options for 200,000 shares of AMG, resulting in a transaction value of $19,140,000.

As of Wednesday morning, Affiliated Managers Group shares are down by 0.0%, with a current price of $170.19. This implies that Horgen's 200,000 shares have a value of $19,140,000.

All You Need to Know About Affiliated Managers Group

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.

Affiliated Managers Group: A Financial Overview

Negative Revenue Trend: Examining Affiliated Managers Group's financials over 3 months reveals challenges. As of 30 June, 2024, the company experienced a decline of approximately -2.38% in revenue growth, reflecting a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.

Navigating Financial Profits:

• Gross Margin: The company excels with a remarkable gross margin of 56.97%, indicating superior cost efficiency and profitability compared to its industry peers.

• Earnings per Share (EPS): Affiliated Managers Group's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 2.42.

Debt Management: Affiliated Managers Group's debt-to-equity ratio is below the industry average at 0.76, reflecting a lower dependency on debt financing and a more conservative financial approach.

Understanding Financial Valuation:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 9.91 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: The P/S ratio of 3.36 is lower than the industry average, implying a discounted valuation for Affiliated Managers Group's stock in relation to sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With a lower-than-industry-average EV/EBITDA ratio of 5.27, Affiliated Managers Group presents a potential value opportunity, as investors are paying less for each unit of EBITDA.

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

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Understanding the Significance of Insider Transactions

Insider transactions, although significant, should be considered within the larger context of market analysis and trends.

Considering the legal perspective, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, according to 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.

Pointing towards optimism, a company insider's new purchase signals their positive anticipation for the stock to rise.

Nevertheless, insider sells may not necessarily indicate a bearish view and can be influenced by various factors.

Understanding Crucial Transaction Codes

For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals 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.