COST - Ares Management: The Train Has Left The Station

2024-02-21 07:00:00 ET

Summary

• Ares Management Corporation has seen a total return of about 80% since March 2022, outperforming the S&P 500's total return of 15%.
• Ares Management was initially considered "expensive" compared to other companies, but its strong growth and earnings quality justify the premium.
• Investors should avoid selling great companies too early for quick gains, as it limits long-term wealth-building potential.

This article was coproduced with Williams Equity Research ("WER").

Since recommending Ares Management Corporation (ARES) in March 2022, the stock has a total return of about 80%. That's good. But it's nothing short of great versus the S&P 500's (SP500) total return of 15% over the same period.

The most common comment received about ARES back in Q1 2022 was that it was "expensive."

Without understanding ARES at a deep level, that was a reasonable conclusion.

In terms of price-to-earnings ratio, it was significantly more expensive than the likes of The Carlyle Group (CG) and even a little pricier than the Blackstone Group (BX)....

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